Trump Calls for 10% Credit Card Rate Cap, Sparks Pushback

With credit card interest rates hovering near record highs, millions of Americans are struggling to keep up with mounting debt. A sudden call from President Donald Trump to cap rates at 10% has reignited a long-running debate in Washington, raising questions about authority, feasibility, and who truly benefits.

A Surprise Pledge Rekindles a Familiar Debate

U.S. President Donald Trump announced on Friday that he wants credit card interest rates capped at 10% for one year, beginning January 20, 2026. The proposal, shared via his Truth Social account, immediately drew national attention, but also skepticism.

Trump did not explain how the cap would be enforced, nor did he outline whether his administration plans to pursue legislation to make it binding on banks and credit card issuers. Without those details, the announcement raised more questions than answers.

A Campaign Promise Returns to the Spotlight

The idea of limiting credit card interest rates was not new to Trump’s political platform. He floated the proposal during the 2024 presidential campaign, which he ultimately won. At the time, analysts and lawmakers largely dismissed the pledge, noting that such a sweeping financial regulation would require congressional approval.

Now, with Republicans holding narrow majorities in both the Senate and the House of Representatives, Trump’s renewed call has reopened debate over whether Congress might finally act, or whether the proposal remains symbolic.

Lawmakers Across Parties Acknowledge the Problem

High credit card interest rates have long been a rare point of bipartisan concern. Lawmakers from both major parties have publicly criticized rates that often exceed 20%, arguing they trap consumers in cycles of debt.

Despite that shared frustration, legislative momentum has stalled. While several bills addressing interest rate caps have been introduced in recent years, none have advanced into law. Trump’s latest statement did not endorse any specific bill or legislative pathway.

Critics Question the Lack of Legal Backing

Opposition lawmakers were quick to challenge the president’s announcement. Senator Elizabeth Warren, a Democrat and prominent member of the Senate Banking Committee, dismissed the proposal as ineffective without congressional action.

She argued that asking credit card companies to voluntarily comply carries no legal weight and accused Trump of failing to follow through on consumer protection promises. Warren also pointed to the administration’s efforts to weaken the Consumer Financial Protection Bureau (CFPB) as evidence that the rate cap announcement lacks substance.

White House and Banks Stay Quiet

The White House did not immediately provide clarification when asked how the proposed cap would be implemented. A brief social media post reiterated that the president intended to cap rates, but offered no further explanation.

Major financial institutions, including American Express, Capital One, JPMorgan Chase, Citigroup, and Bank of America, declined to comment on the proposal. Their silence underscored the uncertainty surrounding whether the announcement carries any regulatory force.

Banking Groups Warn of Unintended Consequences

Industry advocates pushed back strongly against the idea. In a joint statement, several influential banking and financial trade groups warned that a 10% interest rate cap could shrink access to credit.

According to the Consumer Bankers Association, Bank Policy Institute, American Bankers Association, Financial Services Forum, and Independent Community Bankers of America, such limits could push lenders to tighten approval standards, potentially driving borrowers toward less regulated and more expensive alternatives.

Bipartisan Bills Already on the Table

Despite the controversy, Trump’s call echoes existing bipartisan efforts in Congress. Senator Bernie Sanders, an independent who often clashes with Trump, previously partnered with Republican Senator Josh Hawley to introduce legislation capping credit card interest rates at 10% for five years. That bill explicitly mandates compliance from credit card companies.

In the House, Democratic Representative Alexandria Ocasio-Cortez and Republican Representative Anna Paulina Luna have introduced similar legislation, highlighting rare cross-party agreement on the issue, even if consensus on execution remains elusive.

Allies Express Doubts

Notably, skepticism has also come from Trump supporters. Billionaire hedge fund manager Bill Ackman, who endorsed Trump in the most recent election cycle, called the president’s rate cap proposal a mistake in a post on X.

Ackman did not elaborate extensively but signaled concerns shared by some in the financial community about market distortions and unintended economic effects.

A Track Record That Raises Questions

The administration’s past actions have complicated Trump’s consumer-friendly messaging. Last year, the Trump administration moved to overturn a Biden-era regulation that capped credit card late fees at $8.

The administration argued in federal court that the rule was unlawful and sided with banking groups challenging it. A federal judge ultimately struck down the regulation, a decision that critics say contradicts Trump’s current stance on protecting consumers from excessive fees.

What This Means for Consumers

For now, the proposed interest rate cap carries no legal force. Without legislation passed by Congress and signed into law, credit card companies are not required to change their pricing structures.

Still, the renewed attention on credit card debt could influence future policy debates, especially as household borrowing costs remain high and consumer delinquencies continue to rise.

Symbol or Starting Point?

Trump’s announcement has revived a politically sensitive issue that cuts across party lines but remains difficult to resolve. Whether the proposal becomes a serious legislative effort or fades as another unenforced promise will depend largely on congressional action in the coming months.

What is clear is that credit card interest rates remain a pressing concern for millions of Americans, and the debate over how to rein them in is far from over.

(With inputs from Reuters.)

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