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. This initiative aims to alleviate financial burdens on consumers, potentially saving Americans tens of billions of dollars.

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%." The president 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. While the credit card industry would experience a significant impact, it is projected to remain profitable, though consumers might see reductions in rewards and other perks.

As of 2024, about 195 million Americans held credit cards, with total credit card debt reaching $1.23 trillion. Average interest rates ranged between 19.65% and 21.5%, according to the Federal Reserve.

Senator Roger Marshall, R-Kan., who discussed the proposal with Trump, expressed support, stating the effort aims to "lower costs for American families and to reign in greedy credit card companies who have been ripping off hardworking Americans for too long."

Legislation to implement such a cap has been introduced in both the House and the Senate. Senators Bernie Sanders, I-Vt., and Josh Hawley, R-Mo., proposed a plan in February to cap interest rates at 10% for five years, seeking to build momentum for their measure.

The White House has not provided further details on how the president intends to enforce the proposed cap or whether discussions have been held with credit card companies regarding the initiative.