A cap is a set limit on some form of income, interest, fees, loan, or benefit. Examples of caps:
- A loan can have varying interest rates based on the market, but the loan can have a maximum or cap rate of interest.
- Businesses can set a cap on maintenance fees for frequent customers.
- In order to limit welfare benefits like supplemental security income or SNAP to low-income individuals, Congress sets a cap on total assets an individual can own to be eligible for benefits.
[Last updated in June of 2021 by the Wex Definitions Team]