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

President Donald Trump announced on Friday his intention to implement a one-year cap on credit card interest rates at 10%, starting January 20, 2026. The president stated that this measure aims to prevent consumers from being "ripped off" by credit card companies charging interest rates of 20% to 30% or higher.

The announcement has elicited mixed reactions. Democratic Senator Elizabeth Warren criticized the proposal, stating that without legislative action, the call is ineffective. Conversely, Republican Senator Josh Hawley expressed support, indicating his readiness to vote for such a measure.

The banking industry has voiced strong opposition. A coalition of banking groups, including the Consumer Bankers Association and the American Bankers Association, argued that a 10% cap would reduce credit availability and drive consumers toward less regulated, more costly alternatives.

Financial analysts have also weighed in. Billionaire investor Bill Ackman warned that capping interest rates at 10% could lead credit card lenders to cancel cards for consumers, forcing them to seek credit from less favorable sources.

Legislative efforts to cap credit card interest rates have been introduced previously. Senators Bernie Sanders and Josh Hawley, along with Representatives Alexandria Ocasio-Cortez and Anna Paulina Luna, have proposed similar measures, but these bills have yet to advance in Congress.

Research from Vanderbilt University suggests that implementing a 10% cap could save Americans approximately $100 billion annually in interest payments. The study also indicates that while the credit card industry would face significant profit reductions, it would remain profitable, though rewards programs might be scaled back.

As of now, major U.S. banks and credit card issuers, including American Express, Capital One Financial, JPMorgan Chase, Citigroup, and Bank of America, have not publicly responded to the president's proposal.