Trump Seeks 10% Cap on Credit Card Interest Rates

“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,” the president wrote Friday (Jan. 9) on his Truth Social platform.

It was not immediately clear how the administration would put this plan into effect. Trump said his call for lower rates was “effective January 20,” the one-year anniversary of his inauguration.

The proposal drew criticism from a collection of industry groups, including the Bank Policy Institute, American Bankers Association, Consumer Bankers Association, Financial Services Forum and Independent Community Bankers of America.

“We share the President’s goal of helping Americans access more affordable credit,” the groups said in a statement provided to PYMNTS.

“At the same time, evidence shows that a 10% interest rate cap would reduce credit availability and be devastating for millions of American families and small business owners who rely on and value their credit cards, the very consumers this proposal intends to help. If enacted, this cap would only drive consumers toward less regulated, more costly alternatives.”

Industry groups made a similar argument last year following proposed legislation from Sen. Bernie Sanders, I-Vt., and Sen. Josh Hawley, R-Mo.

The Sanders-Hawley bill would cap the interest rates at 10%, with that limit remaining in effect for five years, PYMNTS reported last winter.

“When large financial institutions charge over 25% interest on credit cards, they are not engaged in the business of making credit available. They are engaged in extortion and loan sharking,” Sanders said in a news release at the time.

Hawley added: “Capping credit card interest rates at 10%, just like President Trump campaigned on, is a simple way to provide meaningful relief to working people.”

During the 2024 presidential campaign, Trump had floated the idea of a “temporary” interest rate cap. 

Trump’s proposal followed new Federal Reserve data last week showing that total consumer credit outstanding was up at a seasonally adjusted annual rate of 1% in November, falling from 2.2% in October and bringing outstanding balances to $5.1 trillion.

“The deceleration reflects a meaningful shift in how credit is being used rather than a collapse in demand,” PYMNTS wrote last week.

The Fed data coincided with the release of new findings on job security and affordability from the Federal Reserve Bank of New York and the latest employment situation report from the U.S. Bureau of Labor Statistics.

“Together, the three datasets suggest consumers are becoming more selective, more intentional and more risk-aware — not disengaged,” the report added.