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Donald Trump Reinstated campaign promise to cap 10% over one year credit card He believes the move could save Americans tens of billions of dollars. However, the proposal met with immediate opposition from the financial community.
It’s unclear whether Trump plans to implement the cap through executive action or legislation. However, a Republican senator confirmed discussions with Trump and vowed to work on a bill with his “full support.” Trump had previously hoped that the cap would be implemented by January 20, one year after he takes office.
Expect strong resistance wall street and credit card companies that have made significant contributions to his 2024 campaign and second-term agenda. “We will no longer allow the American public to be deceived by credit card companies charging 20 to 30 percent interest rates,” Trump wrote on Truth Social.
Researchers who looked at Trump’s campaign promise after it was first announced found that Americans would save about $100 billion a year in interest if credit card interest rates were capped at 10%. The same researchers found that while the credit card industry will take a significant hit, it will remain profitable, although credit card rewards and other benefits may be reduced.
By 2024, approximately 195 million people in the United States will have credit cards, with interest charges reaching $160 billion. Consumer Financial Protection Bureau explain. Americans now carry more credit card debt than ever before, reaching about $1.23 trillion, according to third-quarter data from the New York Fed.
Additionally, Americans pay an average of 19.65% to 21.5% in interest on their credit cards, according to data from the Federal Reserve and other industry tracking sources. That rate fell last year as the central bank lowered its benchmark interest rate, but is near its highs since federal regulators began tracking credit card rates in the mid-1990s. That’s significantly higher than a decade ago, when the average credit card interest rate was about 12%.
The Republican administration has proven particularly friendly to the credit card industry.
Capital One faced little resistance from the White House when it completed its acquisition and merger with Discover Financial in early 2025, a deal that created the largest credit card company in the United States. The Consumer Financial Protection Bureau, whose main mission is to pursue alleged wrongdoing by credit card companies, has been largely ineffective since Trump took office.
In a joint statement, the banking industry opposed Trump’s proposal.
“If enacted, this cap would only prompt consumers to switch to less regulated and more costly alternatives,” the American Bankers Association and its allied groups said.
Bank lobbyists have long argued that lowering interest rates on credit card products would require banks to lend less to riskier borrowers. When Congress set a cap on how much stores paid the big banks when customers used their debit cards, the banks responded by eliminating all rewards and benefits for those cards. Debit card rewards have only recently returned to consumers. For example, United Airlines now offers a debit card that earns miles on purchases.
The United States already has interest rate caps on certain financial products and certain populations. The Military Lending Act makes it illegal to charge service members more than 36% on any financial product. State credit union regulators have capped interest rates on credit union credit cards at 18%.
Credit card companies generate three revenue streams from their products: fees charged to merchants, fees charged to customers, and interest charged on balances. The argument of some researchers and left-leaning policymakers is that banks receive enough revenue from merchants to remain profitable if interest rates are capped.
Brian Shearer, director of competition and regulatory policy at the Vanderbilt Policy Accelerator, who wrote a study last year on the impact of Trump’s proposals on the industry, said: “As banks claim, a 10% cap on credit card interest could save Americans $100 billion a year without causing a large number of account closures. That’s because the few large banks that dominate the credit card market are making absolutely huge profits on customers of all income levels.”
The White House did not respond to questions about how the president sought to cap interest rates or whether he had discussed the idea with credit card companies.
Sen. Roger Marshall, R-Kansas, who said he spoke with Trump on Friday night, said the move was aimed at “lowering costs for American families and reining in greedy credit card companies that have long exploited hard-working Americans.”
Legislation in the House and Senate would accomplish what Trump seeks.
Sen. Bernie Sanders, R-Vt., and Josh Hawley, R-Mo., released a plan in February that would immediately cap interest rates at 10% for five years, hoping to leverage Trump’s campaign promises to build momentum for their measure.
Hours before Trump spoke, Sanders said the president was not working to cap interest rates and was instead taking steps to deregulate big banks, allowing them to charge higher credit card fees.
Similar legislation has been introduced by Reps. Alexandria Ocasio-Cortez of New York and Anna Paulina Luna, R-Fla. Ocasio-Cortez is a frequent political target of Trump, while Luna is a close ally of the president.