Trump urges credit card companies to slash interest rates to 10% for one year

President Trump has put forward a bold proposal to cap credit card interest rates at 10% for a year, a move that has garnered support from lawmakers on both sides of the aisle but has faced resistance from card issuers. In a post on Truth Social, the president decried the high interest rates charged by credit card companies, which he said had gone unchecked during the previous administration. The proposed cap would take effect on Jan. 20, 2026, marking the one-year anniversary of his second inauguration.

Currently, the average credit card interest rate stands at over 20%, according to Federal Reserve data. Therefore, a 10% cap would represent a significant reduction in borrowing costs for consumers. It remains unclear how the president plans to enforce this cap, whether through executive action or by pressuring credit card issuers to voluntarily lower their rates.

The call for a cap on credit card interest rates has garnered bipartisan support, with lawmakers such as Senators Josh Hawley and Bernie Sanders introducing legislation to impose a 10% cap. Other proposed bills have suggested less stringent caps on fees and interest rates. Sanders, in particular, has been vocal in his criticism of Trump for not following through on his promise to limit interest rates.

Supporters of the cap argue that it would provide relief to millions of Americans burdened by credit card debt, which reached a record high of $1.23 trillion in the third quarter of last year. They contend that credit card companies can afford to reduce their rates, as evidenced by the exorbitant profits they have made from interest and fees.

However, opponents of the cap, including banks and credit card issuers, warn that imposing limits on interest rates could have adverse consequences. They argue that such a cap may lead lenders to restrict credit card access for riskier borrowers, potentially leaving many without access to credit. Groups representing banks have expressed concern that millions of households could face restrictions on credit card usage if a 10% cap is implemented.

Billionaire investor Bill Ackman, a supporter of Trump, has called the idea a “mistake,” warning that restricting interest rates could drive consumers to seek out even more expensive forms of credit. The Electronic Payments Coalition, which represents credit card issuers, has cautioned that a one-size-fits-all cap could limit consumer choice and access to credit.

Despite the opposition, Trump remains committed to addressing affordability concerns by proposing measures to lower borrowing costs. In addition to the credit card interest rate cap, he recently directed the federal government to purchase mortgage bonds in an effort to reduce mortgage rates. The president has also urged the Federal Reserve to cut its benchmark interest rate more aggressively, signaling his focus on making borrowing more affordable for Americans.

As Trump prepares to nominate a new Federal Reserve chair, he has emphasized the importance of honesty and transparency in setting interest rates. The president’s efforts to tackle affordability issues reflect his commitment to addressing the economic challenges facing American consumers.

Overall, the proposal to cap credit card interest rates at 10% has sparked a contentious debate between supporters and opponents. While supporters argue that it would provide much-needed relief to debt-burdened Americans, opponents caution that it could have unintended consequences for credit card access and consumer choice. As the debate continues, it remains to be seen how the president will move forward with his plan to cap credit card interest rates and address affordability concerns.