Trump Calls for Capping Credit Card Interest Rates at 10% for One Year

SadaNews - President Donald Trump has called for a temporary cap on credit card interest rates at 10% for one year, starting January 20, 2026, without providing details on the legal mechanisms to implement the decision or how to compel companies to comply.

In a post on the "Truth Social" platform, he stated that Americans have been "exploited" by credit card companies, adding: "We will not allow the American public to be exploited any longer," although the post did not include explicit support for any existing bill in Congress.

Trump had made this promise during his successful 2024 election campaign, but analysts then downplayed the chances of its implementation, considering that imposing a mandatory interest rate cap requires legislation from Congress.

Record Benefits and Debts

This call for capping credit card interest rates comes at a time when borrowing costs remain at historically high levels, with the average interest rate currently around 19.65%, after peaking above 20.7% in 2024, making the proposed cap of 10% a nearly halving reduction compared to prevailing market levels.

At the same time, U.S. household debt has surpassed $18 trillion, and credit card debt reached $1.23 trillion by the end of the third quarter of 2025, marking a record level, amid warnings from economists that sustained high interest rates could exacerbate the risk of default, particularly among middle- and low-income families.

Political Division and Legislative Reservations

The proposal has generated mixed reactions within Congress, despite a shared concern between both parties about the significant rise in credit card interest rates.

Democratic Senator Elizabeth Warren stated that Trump's call is "meaningless" in the absence of a binding bill, adding: "Appealing to credit card companies to act responsibly is just a joke," referring to what she described as previous attempts by the administration to reduce the role of the Consumer Financial Protection Bureau.

Furthermore, Democratic Senator Bernie Sanders and Republican Senator Josh Hawley had previously put forward a joint bill aimed at capping credit card interest rates at 10% for 5 years, as part of a broader package to ease burdens on consumers.

Congresswomen Alexandria Ocasio-Cortez and Anna Paulina Luna also introduced a similar bill in the House of Representatives, signaling bipartisan interest in the issue.

Republicans currently hold a narrow majority in both the Senate and the House, making it uncertain whether controversial legislation can pass.

The White House has not released any additional details on how to implement the proposal, merely stating via social media that the president "is working to set an interest rate cap."

Warnings from the Banking Sector

In this context, banking lobby groups expressed strong opposition to the proposal, warning that imposing a cap at 10% could lead to "restricting credit availability" and push consumers towards less regulated and more costly alternatives. This warning was made in a joint statement issued by banking associations, including those representing commercial banks and major financial institutions.

Conversely, billionaire hedge fund manager Bill Ackman, who supported Trump in the recent elections, described the U.S. president's call as "a mistake," according to a post he made on the X platform.

Major U.S. banks and credit card issuers, including American Express, Capital One, JPMorgan, Citibank, and Bank of America, did not respond to requests for comment.

How the Debate Ignited...

The current debate around capping credit card interest rates follows a regulatory battle that began during the administration of former President Joe Biden when the Consumer Financial Protection Bureau issued a rule aimed at limiting late fees on credit cards to just $8, instead of an average of around $30, as part of a broader campaign against what the administration called "unfair fees."

However, the rule faced strong opposition from major banks and banking lobby groups, who legally challenged it on the grounds that it exceeds the powers granted by the Credit Card Act of 2009.

Notably, the Trump administration supported those legal challenges and requested a federal court to strike down the rule, arguing that it was illegal and detrimental to credit availability.

In 2025, a federal judge ruled to overturn the rule, agreeing with the banking sector's arguments, effectively ending one of the Biden administration's most significant efforts to tighten oversight of credit card companies and reopening the debate on the limits of government intervention in pricing financial services and protecting consumers.