Former President Donald Trump announced on Friday a call for instituting a temporary cap of 10% on credit card interest rates, framing the proposal as a response to what he describes as consumers being unfairly "ripped off." The suggested measure would take effect on January 20, marking one year since his potential return to the White House.
Trump shared this proposal in a post on his social media platform, Truth Social, emphasizing "AFFORDABILITY!" as the key justification for the credit card interest cap. However, the announcement did not provide clarity on how the ceiling would be implemented, including whether it would be voluntary for credit card issuers or enforced through regulatory means.
This initiative arises against the backdrop of increasing public frustration over high living costs and has become a notable political liability for Trump and the Republican Party. Inflationary pressures accumulated over recent years have strained household finances, with credit card interest rates contributing significantly to debt servicing costs. In his messaging, Trump directly attributes the elevated credit card rates largely to policies enacted under President Joe Biden's administration.
The proposal represents a marked shift in Trump’s approach to credit regulation. In 2023, his administration withdrew an $8 cap on credit card fees introduced by the Biden administration, a move that legal observers suggested risked increasing costs for consumers. The Consumer Financial Protection Bureau (CFPB) had previously estimated that capping credit card fees could save American families over $10 billion annually by reducing average fees from $32.
The Biden administration's effort was initially blocked by a federal judge in 2024, and the Trump administration actively sided with banking institutions pursuing legal challenges to prevent the fee limit’s enforcement. Given this history, it remains uncertain if financial institutions would support Trump’s current proposal to cap interest rates.
Credit card interest constitutes a major revenue source for banks and lenders, and regulatory caps could have broader consequences. Restricting these rates might prompt lenders to tighten underwriting standards, potentially limiting credit access for lower-income consumers or individuals with less favorable credit ratings. Such an outcome could deepen economic disparities, often characterized as the widening "K-shaped" recovery where affluent segments benefit while others face stagnation or decline.
While many higher-income Americans have experienced gains through stock market growth, appreciation in home values, and rising wages, those on the lower end have endured the pressure of inflation, elevated debt costs, and a cooling labor market, compounding challenges to financial well-being.
Trump’s credit card rate cap announcement came amid a series of populist economic communications disseminated on social media over the same week, suggesting a strategic effort to influence public perception on affordability issues. Earlier in the week, he highlighted initiatives such as ordering representatives to invest in mortgage-backed securities to reduce housing costs and proposing bans on institutional investors buying single-family homes.
Despite these efforts, convincing the public of meaningful improvements remains difficult. A recent CNN poll found that 61% of surveyed Americans believe Trump’s economic policies have deteriorated the country's financial conditions. Compounding concerns, a New York Federal Reserve report indicated that Americans’ expectations regarding employment prospects had dropped to historically low levels this year.
At the regulatory level, the Trump administration has engaged in efforts to dismantle the CFPB, the agency responsible for overseeing financial services and protecting consumers from unfair practices. The agency has long been a focus of criticism from conservative figures, including Trump, who have argued for reduced oversight.
Requests for comment about the credit card rate cap proposal have been directed to the White House and the American Bankers Association, but no responses have been disclosed.
This coverage incorporates additional details and developments related to this evolving policy discussion.