What Trump Announced
In a post on his social media platform Truth Social, Trump said the move would end what he characterized as credit card companies “ripping off” Americans with interest rates in the 20%–30% range — rates that he said had persisted under the previous administration.
He pledged that the new cap would limit credit card interest to 10% starting January 20.
While Trump framed the policy as a major affordability initiative, details on how it would be implemented — or whether it requires congressional approval — were not provided in the initial announcement.
It remains unclear whether regulators could enforce such a cap without legislation from Congress.
Background: A Campaign Promise
Trump has previously spoken about capping credit card interest rates during his 2024 campaign, promising a “temporary cap” around 10% to help working Americans catch up with financial pressures.
During the 119th Congress, lawmakers from both parties have proposed legislation aligned with the idea.
Senators Bernie Sanders (I‑Vt.) and Josh Hawley (R‑Mo.) introduced a bipartisan bill that would cap credit card interest at 10% for five years — yet such proposals have struggled to gain traction and have not become law.
Representatives from other corners of the political spectrum, including Alexandria Ocasio‑Cortez (D‑N.Y.) and Anna Paulina Luna (R‑Fla.), have also backed similar efforts in the House.
Reactions and Debate
Supporters of a rate cap argue that high credit card interest increases the financial burden on consumers, especially those carrying balances from month to month.
Advocates say lowering the ceiling could save American households tens of billions annually in interest costs.
However, critics — including financial industry groups and some economists — warn that an artificially low cap could lead to unintended consequences:
Reduced access to credit for consumers with lower credit scores, as lenders might cut back on issuing new cards if profitability is squeezed.
Higher fees or changes to existing rewards programs as card issuers look for revenue sources outside interest.
Legal and regulatory hurdles, as the power of regulators to impose such caps without Congress is uncertain.
Even some policy analysts caution that a strict cap might push borrowers toward even higher‑cost credit products outside traditional banking channels.
What Happens Next
For Trump’s one‑year 10% cap to take effect in practice, Congress would likely need to act by passing enabling legislation or amending existing laws — a tall order given the mixed support and legal complexities involved.
Meanwhile, the proposal has sparked a broader conversation in Washington about consumer credit costs and financial regulation.
At this stage, the White House has not released a full enforcement plan or answers to how the cap would work across different types of credit cards and lenders.
The situation continues to develop, with both political and financial stakeholders watching closely. Mm
