USA (WS News) – U.S. President Donald Trump has reignited the debate over credit card interest rates by calling for a one-year cap of 10%, arguing that Americans have been unfairly burdened by rates that often exceed 20% or even 30%. The announcement, made via Truth Social, immediately drew national attention — not just for its populist appeal, but for the serious legal and economic questions it raises.
While many Americans struggling with record-high credit card debt welcomed the idea, critics across the political and financial spectrum questioned whether the proposal is legally enforceable, economically viable, or merely a symbolic gesture without congressional backing.
What Exactly Did Trump Propose?
Trump stated that starting January 20, 2026, credit card interest rates should be capped at 10% for one year. He framed the proposal as an affordability measure, saying Americans have been “ripped off” by credit card companies charging excessive interest.
However, the announcement lacked critical details:
- No explanation of how the cap would be enforced
- No clarification on whether participation would be voluntary or mandatory
- No explicit support for any existing bill in Congress
This absence of specifics is the core reason critics say the proposal, as it stands, has no legal force.
Can a President Cap Credit Card Interest Rates Alone?
Short answer: No, not realistically.
Credit card interest rates are regulated through federal law, meaning a binding cap would require:
- Congressional approval
- A formal bill passed by both chambers
- Presidential signature
Democratic Senator Elizabeth Warren, a long-time advocate for consumer financial protection, called Trump’s announcement “meaningless without legislation,” arguing that asking banks to “play nice” does nothing without enforceable law.
Even analysts who support lower interest rates agree: without Congress, this cap cannot be implemented nationwide.
Congress Has Already Tried — and Failed
Interestingly, Trump’s proposal mirrors an existing bipartisan effort.
In 2025, Senators Bernie Sanders (Democrat) and Josh Hawley (Republican) introduced a bill to cap credit card interest rates at 10% for five years. The legislation aimed to provide relief to working families as U.S. credit card debt surpassed $1.17 trillion, the highest level in history.
Despite public support, the bill stalled due to intense opposition from banking industry groups, who argue that such caps would disrupt credit markets.
Trump’s announcement did not explicitly endorse this bill — a move many lawmakers say weakens the seriousness of his proposal.
Why Banks and Wall Street Are Pushing Back
Banking associations responded quickly, warning that a 10% cap could reduce access to credit, especially for lower-income and higher-risk borrowers.
Their argument is simple:
- Credit cards are unsecured loans
- Higher-risk borrowers require higher interest rates to offset defaults
- If lenders can’t price risk properly, they will cut credit lines or cancel cards
Billionaire hedge fund manager Bill Ackman, a Trump supporter, publicly criticized the proposal, calling it a “mistake.” He warned that millions of Americans could lose access to credit altogether and be pushed toward payday lenders or unregulated alternatives with even worse terms.
Could the Cap Backfire on Consumers?
This is where the debate gets uncomfortable.
While a 10% cap sounds consumer-friendly, economists warn of unintended consequences:
- Tighter lending standards
- Fewer credit cards issued to subprime borrowers
- Reduced credit limits
- Higher reliance on “buy now, pay later” services or payday loans
Brian Jacobsen, chief economist at Annex Wealth Management, noted that if companies can’t price risk, they simply stop offering credit — which could hurt the very people the policy is meant to help.
The Political Angle: Affordability vs. Credibility
Trump’s announcement comes at a time when affordability remains a political weakness for Republicans. Polls show a majority of Americans believe economic conditions have worsened, and inflation’s long-term effects are still being felt.
Critics also point out an apparent contradiction:
Trump previously supported rolling back Consumer Financial Protection Bureau (CFPB) rules that would have saved consumers billions in fees — yet now positions himself as a defender of borrowers.
That inconsistency has made many voters skeptical, even if they support the idea in principle.
What Happens Next?
Unless Trump formally backs legislation or Congress revives the Sanders–Hawley bill, the proposal is unlikely to move beyond rhetoric.
For now:
- No rates are capped
- Banks are not legally obligated to comply
- Consumers should not expect immediate relief
The idea may pressure lawmakers to revisit the issue, but policy change requires law, not posts.
Final Takeaway
A 10% cap on credit card interest rates could offer real relief — if implemented through Congress and paired with broader financial reforms. Without that, Trump’s proposal remains a political signal rather than an actionable policy.
For Americans drowning in high-interest debt, the debate highlights a deeper truth: affordability problems won’t be solved by slogans — only by enforceable laws and consistent economic strategy.
