President Trump is calling for a 10% cap on credit card interest rates for one year, an idea that has drawn strong support from lawmakers in both parties but pushback from card issuers.
"Please be informed that we will no longer let the American Public be 'ripped off' by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration," the president wrote on Truth Social.
Mr. Trump said the cap on interest rates should begin on January 20, 2026 — the one-year anniversary of his second inauguration. Credit card interest rates currently average over 20%, according to Federal Reserve statistics, making a 10% cap a significant cut in borrowing costs.
Bipartisan Support
The idea of capping credit card interest rates has drawn bipartisan backing. Republican Sen. Josh Hawley of Missouri and independent Sen. Bernie Sanders of Vermont teamed up to introduce legislation that would impose a 10% cap. A similar measure was introduced in the House by Democratic Rep. Alexandria Ocasio-Cortez of New York and Republican Rep. Anna Paulina Luna of Florida.
Americans owed a total of $1.23 trillion in credit card balances in the third quarter of last year — the highest level on record, according to the Federal Reserve Bank of New York. A 2024 study by NerdWallet found the average U.S. household with credit card debt owed $10,563.
Industry Opposition
A coalition of groups representing banks — including the American Bankers Association and the Bank Policy Institute — warned that a 10% interest rate cap "would reduce credit availability and be devastating for millions of American families and small business owners."
The Bank Policy Institute estimated that more than 14 million American households that rarely pay their credit card balances in full could have their access to credit eliminated or curtailed by a 10% cap.
Billionaire investor Bill Ackman, who backed Mr. Trump in his 2024 campaign, called the idea a "mistake," writing on X that "credit card lenders will cancel cards for millions of consumers who will have to turn to loan sharks."
What This Means for Consumers
If enacted, a 10% cap would dramatically lower borrowing costs for the tens of millions of Americans who carry a revolving balance on their credit cards. However, economists and lenders warn that card issuers may respond by tightening credit standards — cutting off access for higher-risk borrowers who need credit most.
