Trump Proposes One-Year Cap on Credit Card Interest Rates at 10%
President Trump proposed a one-year cap on credit card interest rates at 10%, effective January 20, criticizing current rates of 20-30%. The announcement lacks implementation details and enforcement mechanisms. The proposal aims to address affordability concerns amid political focus on consumer costs. Banking industry representatives have previously warned that rate caps could reduce consumer access to credit.
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President Donald Trump announced on Friday a proposal to implement a one-year cap on credit card interest rates at 10%, effective January 20. The announcement, made via social media, targets what Trump describes as excessive rates currently charged by credit card companies.
Proposed Rate Cap Details
Trump's social media post outlined his position on current credit card practices:
| Aspect: | Details |
|---|---|
| Proposed Rate Cap: | 10% |
| Duration: | One year |
| Effective Date: | January 20 |
| Current Rates Criticized: | 20% to 30% and higher |
"Please be informed that we will no longer let the American Public be 'ripped off' by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration. AFFORDABILITY!" Trump wrote in his announcement.
Implementation Questions
The proposal lacks specific implementation details or enforcement mechanisms. It remains unclear whether credit card companies will respond to Trump's call voluntarily or what actions might be taken to enforce any changes. The announcement does not specify whether the cap would apply to all credit card products or particular categories.
Political Context and Criticism
The announcement comes as the Trump administration seeks to address voter concerns about costs and prices ahead of upcoming elections. Senator Bernie Sanders, a Vermont independent, responded on social media platform X, stating: "Trump promised to cap credit card interest rates at 10% and stop Wall Street from getting away with murder. Instead, he deregulated big banks charging up to 30% interest on credit cards."
Industry Response
The Bank Policy Institute has previously addressed similar congressional proposals in reports, expressing concerns about rate caps. The institute argued that "while the proposed cap is a well-intentioned effort to reduce the high debt burden some households are facing, it would harm consumers' access to card credit." The organization emphasized that "bank cards, because of their relatively low minimum required monthly payments, are a vital and affordable source of backup liquidity for many households."
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