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

President Donald Trump has announced a proposal to cap credit card interest rates at 10% for one year, starting January 20, 2026. This initiative aims to alleviate financial burdens on consumers, who currently face average interest rates between 19.65% and 21.5%, according to Federal Reserve data.

In a social media post, Trump stated, "We will no longer let the American Public be ripped off by Credit Card Companies that are charging Interest Rates of 20 to 30%." He did not specify whether the cap would be implemented through executive action or legislation.

The banking industry has expressed strong opposition to the proposal. In a joint statement, the American Bankers Association and allied groups argued that such a cap would reduce credit availability and drive consumers toward less regulated, more costly alternatives.

Research indicates that capping interest rates at 10% could save Americans approximately $100 billion annually in interest payments. While the credit card industry would experience a significant impact, it is projected to remain profitable, though rewards and perks may be scaled back.

Legislative efforts to implement similar caps have been introduced in Congress. Senators Bernie Sanders and Josh Hawley proposed a plan in February 2025 to cap interest rates at 10% for five years. Representative Alexandria Ocasio-Cortez has also introduced similar legislation.

The White House has not provided further details on how the proposed cap would be enforced or whether discussions have taken place with credit card companies regarding the initiative.