Trump’s Call for 10% Credit-Card Cap

Trump is calling for a temporary nationwide 10% cap on credit‑card interest rates for one year, starting 20 January 2026, but there is currently no clear legal mechanism or passed law to enforce it. The idea is highly controversial: consumer advocates say it could save borrowers tens of billions of dollars, while banks warn it would sharply restrict access to credit and force cuts to rewards, higher fees, or account closures, especially for riskier borrowers.​

What Trump is proposing

• Trump has demanded that card issuers limit annual percentage rates (APRs) on credit cards to 10% for a single year, framing current 20–30% rates as “ripping off” consumers.​

• He has suggested an effective date of 20 January 2026 but has not specified whether he expects voluntary industry compliance, an executive action, or a new law from Congress to make the cap binding.​

Political and legal context

• The 10% cap was first floated as a campaign pledge in 2024 and has since been echoed in bipartisan proposals from figures like Bernie Sanders, Josh Hawley, Alexandria Ocasio‑Cortez, and Anna Paulina Luna, which would legislate a 10% cap for several years.​

• Existing US rules already cap some rates (for example, a 36% ceiling for active‑duty service members and an 18% cap on some credit‑union cards), but nothing as low as 10% across mainstream credit cards, so any enforceable nationwide cap at that level would require new federal action.​

Potential impact on consumers

• Supporters argue that with many card APRs above 20%, a 10% ceiling could save households around $100 billion a year in interest, easing cost‑of‑living pressures for people carrying balances.​

• Critics counter that hard caps tend to hit riskier borrowers first; industry analysis and Fed data suggest a 10% ceiling could lead to tightened credit lines or loss of access for millions of lower‑score customers, pushing some toward costlier products like payday loans.​

Impact on banks and card products

• Credit cards are a highly profitable “crown jewel” for major issuers such as JPMorgan, Capital One, and Citigroup, and a 10% APR limit would significantly compress margins at current funding and loss levels.​

• Banks and trade groups say that, to preserve viability under a 10% cap, they would likely cut back rewards programs, 0% teaser deals, and promotional offers, and may raise annual fees or other charges, particularly for borrowers seen as higher risk.​

How likely is it to happen?

• Market analysts currently view a strict, binding 10% cap as unlikely in its current form, given strong opposition from the banking lobby, lack of a detailed implementation plan, and the need for Congress to pass and coordinate enforcement.​

• Even so, the push is putting political pressure on card issuers and may increase momentum for some form of tighter regulation or a higher cap level, especially as concerns about affordability and household debt stay in the spotlight.​