On January 12, 2026, President Donald Trump escalated his confrontation with credit card companies concerning interest rates, delivering a stark ultimatum. He declared that credit card issuers must reduce their interest rates to 10% by January 20, 2026. Should they not meet this deadline, he stated such failure would be deemed a "violation of the law" and would provoke "severe" measures against those institutions. This position advances from his earlier, more conciliatory appeals to the financial sector, now embracing potential legal repercussions as a means to enforce compliance.
Previously, the President had used his social media platform to advocate a voluntary cap on credit card interest rates. However, the January 12 statement, made publicly to the press, emphasized a hard deadline accompanied by a clear legal dimension. Trump criticized credit card companies for what he perceives as exploitative practices, highlighting the excessive rates consumers currently face. "They really abuse the public," he remarked, reinforcing his resolve not to allow such circumstances to persist.
Major credit card issuers and banks, including companies like Visa Inc. and Mastercard Inc., stand at the center of this dispute. The President's announcement signals an intent to pursue regulatory crackdowns or execute executive actions targeting these firms if they fail to adhere to the new interest rate limit.
In the days leading up to this ultimatum, on January 10, Trump had unveiled a formal policy proposal via his social media account, advocating a one-year interest rate cap as a solution to ongoing affordability concerns. He condemned credit card lenders for charging rates ranging from 20% to over 30%, claiming that these high rates had gone unchecked during the previous administration. He expressed a commitment to protecting American consumers from being unfairly charged exorbitant fees.
The January 20 deadline was deliberately chosen to align with the first anniversary of Trump’s inauguration, framing the date as a symbolic milestone for his administration’s economic objectives. This timing reinforces the urgency and significance the administration places on this issue.
Adding to the critical discourse on credit card practices, billionaire investor Bill Ackman recently voiced concerns about credit card rewards programs. He contended that the current structure disproportionately burdens low-income consumers, who effectively subsidize perks enjoyed by wealthier cardholders.
Market reactions leading up to and following these announcements reflected moderate optimism. The SPDR S&P 500 ETF Trust and the Invesco QQQ Trust ETF, which track leading U.S. stock indices, closed higher on the Friday preceding the President’s statement. Specifically, the SPY rose by 0.66% to $694.07, and the QQQ increased by 1.00% to $626.70. However, futures for the S&P 500, Nasdaq 100, and Dow Jones indices indicated lower trading on the subsequent Monday.
While the President’s approach stresses consumer protection and affordability, the proposed rate cap would represent a substantial reduction from prevailing market levels, which commonly hover near 25% or above for many credit card users. The enforcement of such a cap could entail significant implications for the credit card industry’s pricing models and revenue structures.
This development represents a notable tightening of the administration’s stance towards financial institutions managing credit card lending practices, marking a clear shift from prior rhetoric toward actionable enforcement mechanisms with a legal underpinning.
Previously, the President had used his social media platform to advocate a voluntary cap on credit card interest rates. However, the January 12 statement, made publicly to the press, emphasized a hard deadline accompanied by a clear legal dimension. Trump criticized credit card companies for what he perceives as exploitative practices, highlighting the excessive rates consumers currently face. "They really abuse the public," he remarked, reinforcing his resolve not to allow such circumstances to persist.
Major credit card issuers and banks, including companies like Visa Inc. and Mastercard Inc., stand at the center of this dispute. The President's announcement signals an intent to pursue regulatory crackdowns or execute executive actions targeting these firms if they fail to adhere to the new interest rate limit.
In the days leading up to this ultimatum, on January 10, Trump had unveiled a formal policy proposal via his social media account, advocating a one-year interest rate cap as a solution to ongoing affordability concerns. He condemned credit card lenders for charging rates ranging from 20% to over 30%, claiming that these high rates had gone unchecked during the previous administration. He expressed a commitment to protecting American consumers from being unfairly charged exorbitant fees.
The January 20 deadline was deliberately chosen to align with the first anniversary of Trump’s inauguration, framing the date as a symbolic milestone for his administration’s economic objectives. This timing reinforces the urgency and significance the administration places on this issue.
Adding to the critical discourse on credit card practices, billionaire investor Bill Ackman recently voiced concerns about credit card rewards programs. He contended that the current structure disproportionately burdens low-income consumers, who effectively subsidize perks enjoyed by wealthier cardholders.
Market reactions leading up to and following these announcements reflected moderate optimism. The SPDR S&P 500 ETF Trust and the Invesco QQQ Trust ETF, which track leading U.S. stock indices, closed higher on the Friday preceding the President’s statement. Specifically, the SPY rose by 0.66% to $694.07, and the QQQ increased by 1.00% to $626.70. However, futures for the S&P 500, Nasdaq 100, and Dow Jones indices indicated lower trading on the subsequent Monday.
While the President’s approach stresses consumer protection and affordability, the proposed rate cap would represent a substantial reduction from prevailing market levels, which commonly hover near 25% or above for many credit card users. The enforcement of such a cap could entail significant implications for the credit card industry’s pricing models and revenue structures.
This development represents a notable tightening of the administration’s stance towards financial institutions managing credit card lending practices, marking a clear shift from prior rhetoric toward actionable enforcement mechanisms with a legal underpinning.