Trump Proposes 10% Cap on Credit Card Interest Rates

In light of growing voter worries about the economy and the cost of living, former President Donald Trump has proposed a policy that would limit credit card interest rates to 10% for a year.

On January 10, he shared a post on Truth Social stating, “As President of the United States, I am calling for a one-year cap on credit card interest rates of 10%, effective January 20, 2026.”

Just two days later, while speaking to reporters on Air Force One, he addressed this policy before an upcoming economic-focused speech in Michigan.

A reporter inquired, “What happens if the credit card companies don’t comply by the January deadline?”

Trump responded, “Well… then they would be breaking the law.” He further accused credit card companies of “truly mistreating the public” and emphasized he would not accept this behavior.

However, there’s a catch. At present, no law exists that enforces a 10% interest rate cap on credit cards.

Trump might be aiming to incorporate this idea into his 2024 campaign. He mentioned this possible cap back in September 2024.

Currently, PolitiFact is monitoring this promise as part of Trump’s campaign commitments, but it appears progress in Congress on such legislation has been limited.

As of now, there hasn’t been any additional information released from the White House regarding this proposal.

Experts suggest that even a presidential directive may lack legal authority in this context. These orders typically direct federal operations but aren’t designed to govern private entities like credit card companies.

Ilya Somin, a law professor, commented, “There can’t be a violation of the law until such a law exists.” He noted there’s been no congressional authorization for the president to set credit card interest rates.

Michael Gerhardt, another law professor, echoed this sentiment, questioning the constitutionality of the proposed order since such regulations should ideally originate from Congress.

We made inquiries to the White House regarding the authority over credit card companies in potential law violations, but no response was received.

Trump’s renewed advocacy for this cap could potentially foster legislative cooperation soon. Elizabeth Warren, a prominent Democrat in the Senate Banking Committee, revealed they were discussing a bill to limit credit card interest rates.

With U.S. credit card balances reaching a staggering $1.23 trillion, bipartisan discussions could gain momentum.

Senators Bernie Sanders and Josh Hawley, along with Representative Anna Paulina Luna, have also expressed support for capping interest rates, asserting that large banks shouldn’t exploit the American public for profits.

Nevertheless, passing a bill to implement this cap by January 20 will likely face significant obstacles in Congress.

Ted Rothman from Bankrate highlighted that the financial industry will strongly oppose interest rate caps, emphasizing the negative impact it could have on banks and credit card companies.

A joint statement from various banking associations warned that a 10% cap might decrease credit availability and adversely affect many American families and small business owners.

Trump could assert that the cap is legally binding, ready to argue his stance in court if necessary.

Legal experts suggest that while such executive actions may face challenges, it’s still possible the former president could pursue them.

Conclusion

Trump has announced that credit card companies must implement a 10% interest cap by January 20, warning of potential legal violations if they don’t comply.

However, no such law was in effect at the time of his statement, and overcoming congressional hurdles in just a week will be quite challenging.

Experts noted that attempts to enforce executive orders on private companies are unlikely to prevail in court, but Trump could possibly still proceed with such orders.

When this was reported, no law or executive order had been established, leading us to label Trump’s assertion as FALSE.