President Trump is calling for a 10% cap on credit card interest rates for one year, an idea that has received strong support from lawmakers in both parties but opposition from card issuers.
“Please know that we will no longer allow the American people to be ripped off by credit card companies charging 20-30% interest rates, and even more, which have worsened unhindered during the Sleepy Joe Biden administration,” the president wrote on Twitter. Social truth Late Friday.
Trump said the cap on interest rates should begin on January 20, 2026, or the first anniversary of his second inauguration.
Credit card interest rates currently average more than 20%, according to Federal Reserve statisticsTherefore, setting a ceiling of 10% would represent a significant reduction in borrowing costs.
It is unclear whether the president will try to enforce the proposed 10% cap through some type of executive action, or if his goal is to pressure credit card issuers to voluntarily lower interest rates. CBS News has reached out to the White House and some of the largest credit card issuers in the United States for comment.
Proponents point to trillions in credit card debt
The idea of capping credit card interest rates has received bipartisan support. Last year, Republican Sen. Josh Hawley of Missouri and Independent Sen. Bernie Sanders of Vermont, who caucuses with Democrats, said, They cooperated to introduce legislation That would impose a 10% cap. It was a similar procedure Also introduced in the House of Representatives Written by Democratic Rep. Alexandria Ocasio-Cortez of New York and Republican Rep. Ana Paulina Luna of Florida.
last Recently proposed legislation It will impose less stringent limits on fees and interest rates.
Mr. Trump too He called for setting a temporary ceiling on interest rates at 10%. On the electoral campaign trail. Hours before the president released his belated social truth message on Friday, Sanders Mr. Trump criticized on X For not implementing his pledge to reduce interest rates.
Supporters of the idea say it would help dozens of Americans languishing under mountains of credit card debt, and argue that credit card issuers Able to lower interest rates.
Americans reached a total of $1.23 trillion in credit card balances in the third quarter of last year, the highest level ever, according to a World Bank report. Federal Reserve Bank of New York. A 2024 study by NerdWallet found that the average American household has credit card debt due $10,563. Meanwhile, the Consumer Financial Protection Bureau found in 2023 that credit card rates had risen “well above the cost of extending credit.”
“We cannot continue to allow big banks to make huge profits and rip off the American people,” Sanders said in a speech. Joint press release With Hawley last year.
He said Luna: “For too long, credit card companies have abused working-class Americans with ridiculous interest rates, trapping them in an almost insurmountable amount of debt.”
Opponents say capping credit card rates could be counterproductive
Opponents of caps, including banks and other credit card issuers, warn that caps on interest rates could force lenders to stop issuing credit cards to many of the riskiest borrowers.
A coalition of groups representing banks — including the American Bankers Association and the Bank Policy Institute — argued in a statement to CBS News on Friday that a 10% interest rate cap “would reduce the availability of credit and be devastating to millions of American families and small business owners who depend on and value their credit cards, the very consumers this proposal is intended to help.”
Bank Policy Institute It is estimated last year that More than 14 million American households who rarely pay their credit card balances in full could have their access to credit eliminated or reduced by 10%. Millions of people who occasionally pay off their balances may also face new restrictions, the group said.
The American Bankers Association has Argued in the past That if credit card issuers end up cutting off access to “all but the least risky customers,” many people who need loans will be forced to turn to “less regulated alternatives” that often charge higher rates, such as payday lenders and pawn shops.
Billionaire investor Bill Ackman, who supported Trump in his 2024 election campaign, called the idea a “mistake.” he Written on X And if card issuers are prevented from charging interest rates high enough to cover their losses and earn strong returns, “credit card lenders will cancel cards for millions of consumers who will be forced to resort to loan sharks.”
Akman He wrote later: “Finding a way to lower credit card rates without taking away credit from many Americans will have a very positive impact on the most disadvantaged Americans.”
“While we appreciate the President’s desire to increase affordability, the plain truth is that setting interest rates at 10% does not make credit more affordable for everyone, but rather makes it out of reach for millions of working Americans because financial institutions will not be able to offer credit cards to most consumers at the 10% rate,” Scott Simpson, CEO of the credit unions of America trade group, told CBS News in a statement.
The Electronic Payments Coalition – which represents credit card issuers and payment networks – said: “The one-size-fits-all 10% cap threatens to make matters worse by limiting access to credit and limiting choice.”
Trump pledges to address affordability
The push to cap interest rates on credit cards is Trump’s latest proposal to lower borrowing costs as he grapples with… Widespread concerns about affordability.
Earlier this week, Mr. Trump The federal government directed To purchase $200 million in mortgage securities using cash from Fannie Mae and Freddie Mac, in an attempt to lower mortgage rates.
The president also urged the Federal Reserve to more aggressively cut its benchmark interest rate, which affects borrowing costs for everything from mortgages and auto loans to business loans — although a rate cut by the Fed would risk causing inflation to spike.
Trump is expected to nominate a new Fed chair in the coming weeks, and told reporters last month that he was “looking for someone who will be honest about interest rates.”
Emma Nicholson and Ryan Sprouse contributed to this report.