Trump Calls for 10% Cap on Credit Card Interest Rates
Henry ThompsonTrump proposes a 10% credit card interest rate cap, yet the plan lacks details, sparking economic warnings and political hurdles.
President Donald Trump on Friday called for a one-year cap on credit card interest rates at 10%, a proposal announced on social media that offered no details on how it would be implemented or enforced.
The move revives a pledge Trump made during his 2024 election campaign, which analysts at the time dismissed because any such cap would require congressional approval. The White House later confirmed the president's call on social media but did not elaborate on the plan.
The Proposal: A Mandate Without a Method
In a post on Truth Social, Trump declared his intention to set the rate cap effective January 20, 2026. "Please be informed that we will no longer let the American Public be 'ripped off' by Credit Card Companies," he wrote.
However, the announcement did not specify how his administration would compel companies to comply, nor did it endorse any existing legislation. Major financial institutions, including American Express, Capital One, JPMorgan, Citigroup, and Bank of America, did not immediately respond to requests for comment.
Bipartisan Concerns Over High Rates
The issue of high credit card interest rates has drawn criticism from lawmakers in both major parties. Republicans currently hold a slim majority in both the Senate and the House of Representatives, where legislative efforts to address the problem have previously been introduced.
Key bipartisan proposals include:
• A bill from Senator Bernie Sanders and Republican Senator Josh Hawley aimed at capping credit card interest rates at 10% for five years.
• A House of Representatives bill introduced by Democratic U.S. Representative Alexandria Ocasio-Cortez and Republican Congresswoman Anna Paulina Luna also seeking to establish a 10% cap.
Despite cross-party interest, these legislative proposals have not yet become law. Opposition lawmakers have criticized Trump for not delivering on his earlier campaign promise to tackle high rates.
Pushback and Economic Warnings
The proposal was met with immediate criticism from some in the financial world. Billionaire fund manager Bill Ackman, who endorsed Trump, labeled the call a "mistake" on the social media platform X.
Ackman warned that forcing rates down could have severe unintended consequences. He argued that without the ability to price for risk, "credit card lenders will cancel cards for millions of consumers who will have to turn to loan sharks for credit at rates higher than and on terms inferior to what they previously paid."
This move also follows the Trump administration's recent action to scrap a Biden-era rule that capped credit card late fees at $8. The administration had supported business and banking groups in a legal challenge that claimed the rule was illegal, and a federal judge ultimately threw it out.
