Trump Proposes One-Year Cap on Credit Card Interest Rates at 10%
Trump announced a proposal to cap credit card interest rates at 10% for one year, targeting current rates of 20-30% or higher. The cap would take effect January 20, 2026, reviving a campaign promise amid bipartisan congressional support for similar measures. However, implementation details remain unclear and critics warn it could lead to widespread credit card cancellations.
*this image is generated using AI for illustrative purposes only.
US President Donald Trump has announced a proposal to cap credit card interest rates at 10% for one year, potentially affecting millions of Americans currently facing borrowing costs that often exceed 20% to 30%. The announcement, made on January 9 via his Truth Social platform, revives a campaign promise and reignites debate over high consumer borrowing costs in the United States.
Proposal Details and Timeline
Trump's announcement targets what he describes as excessively high credit card interest rates charged by financial institutions. The proposed cap would take effect on January 20, 2026, marking one year since the start of his current presidential term.
| Parameter: | Details |
|---|---|
| Proposed Rate Cap: | 10% |
| Duration: | One year |
| Current Rates: | 20% to 30% or higher |
| Effective Date: | January 20, 2026 |
The White House confirmed Trump's move to limit credit card interest rates in a separate social media post but provided no additional details on implementation or enforcement mechanisms.
Congressional Support and Similar Initiatives
The proposal aligns with existing bipartisan efforts in Congress addressing high credit card interest rates. Several lawmakers from both major parties have previously introduced similar legislation:
- Senate: Bernie Sanders and Josh Hawley introduced bipartisan legislation proposing a 10% cap for five years
- House: Democratic Representative Alexandria Ocasio-Cortez and Republican Congresswoman Anna Paulina Luna introduced comparable legislation
These initiatives reflect cross-party concern over consumer borrowing costs, though no law imposing credit card interest rate caps has been enacted to date.
Industry Response and Implementation Questions
Major US financial institutions, including American Express, Capital One Financial, JPMorgan, Citigroup, and Bank of America, have not immediately responded to the announcement. The White House has not provided details on how the proposed interest rate cap would be implemented or enforced.
Criticism and Potential Consequences
The proposal has drawn criticism from financial sector observers. Billionaire fund manager Bill Ackman warned that limiting interest rates could prompt lenders to cancel credit cards for millions of consumers, potentially forcing them to seek alternative forms of credit with potentially higher costs or less favorable terms.
Related Policy Context
The announcement follows other Trump administration actions affecting credit card regulations. The administration previously moved to eliminate a credit card late-fee rule that had been introduced under the Biden administration, demonstrating continued focus on credit card industry regulation.
20
