US President Donald Trump has announced a plan to cap credit card interest rates at 10% for one year, drawing immediate criticism from prominent financial leaders including hedge fund manager Bill Ackman. The proposal, announced via Trump's Truth Social platform, would take effect January 20, 2026, though the president provided no details on implementation or enforcement mechanisms.

Trump's Credit Card Interest Rate Proposal

Trump framed the initiative as consumer protection, stating on Truth Social: "Effective January 20, 2026, I, as President of the United States, am calling for a one year cap on Credit Card Interest Rates of 10%. Please be informed that we will no longer let the American Public be 'ripped off' by Credit Card Companies." The announcement fulfills a campaign pledge made during the 2024 election cycle, positioning the measure as an affordability improvement for American consumers.

Ackman's Sharp Criticism

Bill Ackman, CEO of Pershing Square and a Trump supporter in the recent election, publicly criticized the proposal as fundamentally flawed. In a tweet directed at the president, Ackman warned: "This is a mistake President @realDonaldTrump. Without being able to charge rates adequate enough to cover losses and earn an adequate return on equity, 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."

Industry Response and Concerns

The banking industry responded with unified opposition through a joint statement from multiple advocacy organizations. The coalition included several major groups:

• Consumer Bankers Association
• Bank Policy Institute
• American Bankers Association
• Financial Services Forum
• Independent Community Bankers of America

These organizations warned that the 10% interest rate cap could "only drive consumers toward less regulated, more costly alternatives," echoing Ackman's concerns about unintended consequences for consumer access to credit.

Banking Sector Silence

Major US financial institutions have remained notably silent on Trump's announcement. Several prominent banks, including American Express, Capital One, JPMorgan, Citigroup, and Bank of America, had not responded to requests for comment at the time of publication, suggesting the industry may be carefully considering its response to the proposed regulation.

Broader Credit Card Policy Context

The interest rate cap proposal represents part of broader Trump administration efforts to reshape credit card regulations. These initiatives include previous attempts to overturn Biden-era regulations that limited late fees to $8, though a federal judge subsequently struck down that effort. The current proposal continues this pattern of challenging existing credit card industry practices through regulatory intervention.

Donald Trump has announced a major financial policy initiative that could significantly impact millions of American consumers by implementing a cap on credit card interest rates. The measure, set to take effect from January 20, establishes a maximum interest rate of 10% for a one-year period.

Policy Details and Implementation

The announcement was made through Trump's Truth Social platform and subsequently shared by The White House on X, indicating the official nature of this policy directive. The timing of the implementation, coinciding with January 20, aligns with the presidential inauguration date, suggesting this as an immediate priority for the administration.

Current Market Conditions

Trump's announcement specifically criticized the existing credit card interest rate structure, highlighting that companies currently charge rates ranging from 20% to 30% or higher. This substantial gap between current market rates and the proposed cap represents a significant shift in the credit card industry's pricing model.

Rationale Behind the Policy

The policy announcement emphasized the financial burden that high credit card interest rates place on American consumers. Trump argued that the current rate structure, with its range of 20% to 30% or higher, creates undue financial stress for cardholders across the country. This cap is positioned as a direct response to these concerns, aiming to provide immediate relief to consumers carrying credit card debt.

Impact on American Consumers

The 10% interest rate cap represents a substantial reduction from current market rates, potentially offering significant savings for Americans who carry credit card balances. The policy targets one of the most common forms of consumer debt, where high interest rates can compound financial challenges for households managing their monthly expenses and long-term financial obligations.