In a sweeping move aimed at direct consumer relief, President Donald Trump has called for a one-year, 10% cap on credit card interest rates.2 The announcement, made late Friday via Truth Social and reaffirmed in comments to reporters aboard Air Force One on Monday, seeks to take effect on January 20, 2026—coinciding with the one-year anniversary of his second inauguration.3+1
The President characterized current rates, which often fluctuate between 20% and 30%, as an “abuse of the American public.”4 This intervention is the latest pillar in the administration’s “affordability offensive,” following similar maneuvers in the housing market to lower mortgage costs.5+1
The Economic Impact: $100 Billion in Annual Savings
If implemented, the proposal would mark a radical departure from the current lending environment. According to Federal Reserve data, general-purpose credit card rates averaged nearly 25% in late 2024.6
- Massive Consumer Windfall: Independent research from the Vanderbilt Policy Accelerator suggests that a 10% cap could save American households approximately $100 billion per year in interest payments.7
- Targeting High-Interest “Gouging”: The President specifically took aim at “greedy” card companies, arguing that the high cost of revolving debt has become a primary driver of financial stress for the middle class.8
- Bipartisan Momentum: While the White House has not yet clarified if this will be enacted via Executive Order or legislation, the move aligns with recent bipartisan efforts from Senators Bernie Sanders and Josh Hawley, who introduced a similar 10% cap bill last year.9
Banking Industry Backlash: A Threat to Credit Access?
The financial sector has responded with immediate and sharp opposition.10 A coalition of five major trade groups, including the American Bankers Association and the Bank Policy Institute, warned that the cap would be “devastating” for credit availability.
| Stakeholder | Perspective | Projected Outcome |
| The White House | Focus on “Affordability” | Direct relief for families struggling with debt. |
| Major Banks | Risk Management Concern | Likely cancellation of cards for high-risk (subprime) borrowers. |
| Consumer Advocates | “Bank Gouging” Critique | Claim that massive profits can absorb the rate reduction. |
| Market Analysts11 | Pragmatic Skepticism12 | Predict a reduction in “rewards” and perks to offset losses.13 |
Bank lobbyists argue that a hard cap would prevent lenders from pricing for risk, potentially forcing them to close the accounts of up to 14 million households with lower credit scores.14 Critics also warn that consumers might be driven toward “less regulated” and more predatory alternatives, such as payday lenders or loan sharks.15+1
Legal and Political Hurdles
The January 20 deadline presents a tight window for implementation. Legal experts remain divided on whether a sitting president has the unilateral authority to cap interest rates through executive action. Without a clear legislative path through Congress, the proposal may face immediate challenges in federal court.
Despite the friction with Wall Street, the President has signaled he is prepared to use his “bully pulpit” to force compliance, warning that credit card companies will face “very severe things” if they do not adhere to the 10% limit.16
The Bottom Line: A Populist Pivot
As the 2026 midterm elections approach, the 10% interest rate cap represents a high-stakes populist pivot.17 Whether it serves as a genuine policy shift or a powerful negotiation tool with the financial industry, the move has successfully shifted the national conversation toward the direct costs of household debt.
