Trump Proposes Credit Card Interest Rate Cap
President Trump is advocating for a one-year cap on credit card interest rates, suggesting a limit of 10%. This idea has garnered support from lawmakers across both parties, although it faces opposition from credit card companies.
In a statement, he expressed concern about the high interest rates that people are facing, which can soar to 20% or even 30%. He criticized the current administration for allowing these rates to spiral out of control, stating, “Americans shouldn’t be ‘ripped off’ by credit card companies.” He aims for this cap to take effect on January 20, 2026, coinciding with his second inauguration anniversary.
Currently, average credit card interest rates exceed 20%, making the proposed cap a significant reduction in borrowing costs. However, it’s uncertain how Trump plans to implement this—whether through executive action or by persuading credit card issuers to lower rates voluntarily. CBS News has reached out for comments from the White House and major credit card companies.
Bipartisan Support for Interest Rate Cap
There’s notable bipartisan enthusiasm for capping interest rates. Last year, independent Senator Bernie Sanders teamed up with Republican Senator Josh Hawley and other Democrats to introduce legislation for a similar 10% cap. Additionally, Democratic Rep. Alexandria Ocasio-Cortez and Republican Rep. Anna Paulina Luna have also proposed similar measures in Congress.
Trump had previously called for a 10% cap during his campaign, and, interestingly, just hours prior to Trump’s Truth Social post, Sanders criticized him for not following through on this commitment.
Supporters argue that the cap could alleviate the financial burden for countless Americans drowning in credit card debt. According to recent statistics, U.S. households have averaged credit card debts nearing $10,600. The Consumer Financial Protection Bureau has pointed out that credit card interest rates are climbing significantly above the actual cost of providing credit.
Concerns About Access to Credit
While supporters are optimistic, not everyone agrees with the proposal. Opponents, including banks and credit issuers, warn that capping interest rates could lead to tighter lending practices, particularly for high-risk borrowers. They argue that a 10% interest rate could force lenders to limit credit cards, which would hurt many consumers, including small businesses that rely on credit.
A bank coalition contends that those who rarely pay off their balances could lose access to credit, while occasional payers may also find themselves facing new restrictions. They fear that increased regulation could push more borrowers toward less regulated options like payday lenders, which often charge exorbitant rates.
Bill Ackman, a billionaire investor and Trump supporter, stated the cap idea is misguided. He expressed concerns that such limitations would result in credit card issuers needing to cancel cards for many consumers and sometimes even push them toward predatory lenders.
The CEO of America’s Credit Union noted that while the intention is to make credit more affordable, a blanket 10% cap could actually make it less accessible, limiting options for many Americans. The Electronic Payments Union echoed this sentiment, stating that a one-size-fits-all cap risks further complicating the issue by reducing credit availability.
Trump’s Broader Efforts for Affordability
This proposal is in line with Trump’s recent focus on reducing financing costs. Not long ago, he directed the federal government to purchase $200 million in mortgage bonds to help lower mortgage rates and has urged the Federal Reserve to consider lowering the benchmark interest rate, which influences borrowing costs across a range of loans.
In the coming weeks, Trump is expected to announce a new Federal Reserve chair, stating that he seeks someone honest regarding interest rates.
