In a late-night announcement on Truth Social, President Trump pledged to stop credit card companies from “ripping off” the public with interest rates that currently average over 20%, and in some cases reach as high as 35%. The move is part of a broader administration push to lower household financial burdens, alongside recent interventions in the mortgage market.
The Core Proposal
- Cap Level: 10% maximum annual percentage rate (APR).
- Duration: One year initially, starting January 20, 2026.
- Potential Savings: Analysts estimate the move could save Americans up to $100 billion in interest costs annually if fully implemented.
- Current Context: Average credit card APRs on new cards currently hover around 23.79%.
Legislative vs. Executive Hurdles
While the White House social media accounts have echoed the announcement as a firm “cap,” several legal and procedural questions remain:
- Congressional Approval: Most legal analysts agree that a nationwide cap on interest rates would require Congress to pass legislation.
- Existing Bills: Bipartisan legislation already exists in Congress—supported by Senators Bernie Sanders and Josh Hawley—that proposes a similar 10% cap, though with different sunset dates.
- Enforcement: The President has not yet provided specific details on how the government would compel private banks to comply or if the participation would be voluntary.
Potential Economic Consequences
While popular with the majority of cardholders, the proposal has faced sharp criticism from the banking sector and some high-profile investors.
| Stakeholder | Potential Impact |
| Consumers | Immediate reduction in monthly debt payments for those who maintain access. |
| Banks & Lenders | Sharp reduction in interest income; industry groups warn they may not be able to cover losses at a 10% rate. |
| Credit Access | The Electronic Payments Coalition warns that up to 88% of open accounts could face closure or credit line reductions. |
| Rewards & Perks | Experts predict a “dramatic reduction” in credit card rewards points and travel perks to offset lower revenue. |
Reaction from Critics and Allies
- Billionaire Bill Ackman: Labeled the move a “mistake,” warning it would force millions of Americans toward predatory “loan sharks” as legitimate credit access dries up.
- Senator Elizabeth Warren: Dismissed the announcement as a “joke,” accusing the President of failing to deliver on the same promise throughout 2025 while attempting to weaken the CFPB.
- Senator Josh Hawley: Enthusiastically supported the move, stating he “can’t wait to vote for this” in the Senate.
