Trump suggests a one-year 10% credit card rate ceiling to cut costs
US President Donald Trump proposed a one-year limit on credit card interest rates at 10 percent, stating that the measure would be implemented starting January 20. This move comes as he intensifies his efforts to tackle voter worries regarding increasing costs in the lead-up to the November midterm elections. January 20 signifies the conclusion of one year of the second Trump administration. In a social media post, Trump stated that credit card companies are charging “20 to 30 per cent, and even more” in interest, asserting that these practices were permitted to persist without oversight during the previous administration. “Please be informed that we will no longer let the American public be ‘ripped off’ by credit card companies,” he wrote.
However, Trump did not clarify how the proposed cap would be implemented, nor did he indicate whether it would necessitate legislation or regulatory action. The situation regarding whether credit card issuers would willingly adhere to the proposed limit, as well as the potential measures the administration might implement to enforce it, remains uncertain. The announcement aligns with Trump’s broader effort to showcase action on prices and household finances, which have become a significant political issue. In the 2024 presidential campaign, Trump promised to pursue restrictions on the interest rates imposed by credit card companies, addressing the prevalent discontent regarding escalating consumer debt.
The proposal elicited swift political responses. Senator Bernie Sanders, an independent from Vermont, stated on X that Trump had previously promised to cap credit card interest rates but instead “deregulated big banks charging up to 30 per cent interest.” Sanders has consistently pushed for more stringent regulations on consumer lending, in collaboration with Republican Senator Josh Hawley of Missouri. Hawley, however, expressed his approval of Trump’s latest remarks, posting on X: “Fantastic idea.” Looking forward to casting my vote for this.
Industry groups within the banking sector have consistently voiced strong opposition to similar proposals in the past. A letter dispatched last year to Sanders and Hawley from multiple banking trade associations cautioned that a 10 percent cap might limit credit access for millions of consumers, as reported. They contended that borrowers who depend on credit cards for short-term financing could be driven towards higher-risk options like pawn shops, auto title lenders, or unregulated online lenders. The Bank Policy Institute also warned that although a cap may be well intended, it could limit consumers’ access to card credit and prompt issuers to cut back on benefits, including widely favored rewards programs linked to spending.
