President Trump Proposes One-Year 10% Cap on Credit Card Interest Rates

President Donald Trump announced a proposal to cap credit card interest rates at 10% for one year, starting January 20, 2026. He stated that this measure aims to prevent consumers from being "ripped off" by credit card companies charging rates between 20% and 30%.

The proposal has garnered bipartisan support. Senators Bernie Sanders and Josh Hawley introduced the "10 Percent Credit Card Interest Rate Cap Act" in February 2025, seeking to amend the Truth in Lending Act to enforce this cap. Similar legislation was introduced in the House by Representatives Alexandria Ocasio-Cortez and Anna Paulina Luna.

Opposition from the banking industry is significant. The American Bankers Association and the Bank Policy Institute argue that a 10% cap could reduce credit availability, potentially harming consumers and small business owners who rely on credit cards.

Research from Vanderbilt University suggests that implementing a 10% cap could save Americans approximately $100 billion annually in interest payments, with banks maintaining profitability through interchange fees.

The administration has not yet detailed how it plans to enforce the proposed cap, whether through executive action or by urging credit card issuers to voluntarily comply.