President Donald Trump is pressing ahead with a campaign pledge to cap credit card interest rates at 10%, renewing a proposal that would significantly reshape the U.S. consumer credit market if enacted.
In a Truth Social post over the weekend, Trump called for a Jan. 20 start date for a one-year cap on credit card interest rates. He followed up Sunday night while speaking with reporters aboard Air Force One, accusing credit card companies of taking advantage of consumers.
“They really abused the public, the credit card companies have. I’m not going to let it happen,” Trump said.
Trump pointed to interest rates that can approach 30%, arguing that many consumers are unaware of how much they are paying in finance charges.
“I want a cap on credit card interest rates because you know some are 28, almost 30 percent,” he said. “The people don’t know they are paying 30 percent, no way. We are putting a one-year cap at 10 percent, and they know it.”
Unclear path to implementation
It remains unclear how Trump would attempt to impose the cap. He did not specify whether the proposal would be pursued through executive action or by working with lawmakers to pass legislation through Congress. Either approach would likely face legal and political challenges, particularly given the long-standing role of Congress and financial regulators in setting lending rules.
Currently, there is no universal cap on credit card interest rates issued by banks. However, the federal regulator of credit unions caps interest rates on credit union credit cards at 18%, a level well above the 10% Trump is proposing.
Potential savings for consumers
Supporters of the idea argue that a lower cap could provide substantial relief to households struggling with high-interest debt. Researchers cited previously by ABC News estimated that a 10% cap could save Americans roughly $100 billion a year in interest payments. That estimate is based on current average credit card interest rates, which range from about 19.65% to more than 21%, with some accounts charging significantly more.
Credit card interest has become a growing concern as borrowing costs have risen alongside broader interest rate increases, putting additional pressure on household budgets.
Pushback from banks and industry groups
Banks and industry groups are expected to strongly oppose the proposal. They argue that a strict interest rate cap would reduce access to credit, particularly for borrowers with weaker credit histories, and could push some consumers toward higher-cost alternatives such as payday loans or pawn shops.
Industry groups also warn that a 10% cap would likely lead to scaled-back rewards programs and other consumer benefits that are currently subsidized by interest revenue.
The American Bankers Association and affiliated groups said in a statement that if enacted, the cap would “drive consumers toward less regulated, more costly alternatives.”
Credit card companies generate revenue through a mix of merchant fees, customer fees, and interest charged on outstanding balances. Banks argue that interest rates are a key tool for pricing risk, especially for subprime borrowers.
Billionaire investor Bill Ackman echoed those concerns in a post on X, warning that a cap could lead to widespread account closures.
“My concern about capping rates at 10% is that doing so will inevitably cause millions of Americans to have their credit cards cancelled as credit card companies lose the ability to adequately price subprime credit risk,” Ackman wrote. “Consumers denied credit cards will be forced to turn to loan sharks whose rates and terms will be vastly worse for borrowers.”
Bank stocks were down in early trading Monday amid renewed attention on the proposal.
Credit card debt exceeds $1 trillion
The debate comes as U.S. credit card debt continues to climb. The Consumer Financial Protection Bureau reported in December that credit card debt surpassed $1 trillion in 2024, reaching roughly $1.2 trillion. The agency said interest costs alone exceeded $160 billion that year.
According to the CFPB, the average monthly balance for cardholders with prime credit rose to about $8,700. LendingTree estimates that the national average unpaid balance across bank and retail credit cards was $7,886 in the third quarter of 2025.
Industry consolidation has also reshaped the market. In early 2025, Capital One completed its merger with Discover Financial, creating the largest credit card issuer in the country.
Some researchers say a rate cap would have uneven effects. Brian Shearer, director of competition and regulatory policy at Vanderbilt Policy Accelerator, said his research shows major banks are generating outsized profits across income levels. He found that a 10% cap would likely reduce lending to consumers with credit scores below 600.
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