Donald Trump this week announced a one-year cap that would limit credit card interest rates to 10%, a move that drew mixed reactions from lawmakers and beyond.
The president’s social media post Friday evening said the restriction would take effect on Jan. 20, but he did not provide details on how the government would implement it or ensure businesses comply.
“Please be advised that we will no longer allow the American public to be ‘ripped off’ by credit card companies charging interest rates of 20-30% and even higher, which have festered unhindered during the sleepy Joe Biden administration,” Trump wrote in a Truth Social article.
“Coincidentally, January 20 will coincide with the first anniversary of the historic and highly successful Trump administration. »
During Trump’s second campaign, he announced he would implement such a cap, as America’s credit card debt reached a record of more than $1.1 billion. This debt then reached a whopping $1.17 trillion in the third quarter of 2024, up from $770 billion in the first quarter of 2021.
Having failed to follow through on this campaign promise, Senators Bernie Sanders and Josh Hawley introduced a bipartisan bill in February 2025 to cap credit card interest rates at 10% for the next five years.
“When large financial institutions charge more than 25 percent interest on credit cards, they do not care about making credit available. They engage in extortion and loan sharking. We cannot continue to allow big banks to make huge profits by fleecing the American people. This legislation will provide working families struggling to pay their bills with desperately needed financial relief,” the lawmakers wrote in a statement announcing the bill.
Despite massive opposition from banking groups, the bill did not advance in Congress.
Just a day before Trump’s announcement, Sanders criticized Trump for failing to keep his campaign promise.
“Trump promised to cap credit card interest rates at 10% and stop Wall Street from committing murder with impunity,” Sanders wrote on X on Friday. “Instead, he deregulated the big banks by charging up to 30% interest on credit cards. »
Hours later, the president made the announcement, sparking pushback from billionaire hedge fund manager and Trump supporter Bill Ackman.
Ackman initially posted, then deleted, a tweet that called Trump’s announcement a “mistake” and warned that credit card lenders could cancel consumer cards if they could not charge rates “adequate enough to cover losses and achieve an adequate return on equity.”
“I think President @realDonaldTrump’s goal of lowering credit card interest rates is a laudable and important goal,” Ackman later posted on X on Saturday. “My concern about capping rates at 10% is that it will inevitably result in card cancellation for millions of Americans because credit card companies will lose the ability to adequately assess subprime credit risk. »
Elizabeth Warren, the Massachusetts senator, also expressed skepticism that Trump could implement such a cap without congressional approval.
“Begging credit card companies to play nice is a joke. I said a year ago that if Trump was serious, I would work to pass a bill to cap rates,” Warren said in a statement.
“Since then, he has done nothing but try to shut down the (Consumer Financial Protection Bureau). Trump doesn’t care about affordability. Americans know fraud when they see it.”
Much like the response to Sanders and Hawley’s bill, there was greater opposition from the Bank Policy Institute, the American Bankers Association, the Consumer Bankers Association, the Financial Services Forum, and the Independent Community Bankers of America, which issued a joint statement about the announcement: “We share the President’s goal of helping Americans access more affordable credit. At the same time, evidence shows that a 10 percent interest rate cap would reduce the availability credit and would be devastating for millions of American families and small business owners who rely on and leverage their credit cards, the very consumers this proposal aims to help. If passed, this cap would only push consumers toward less regulated and more expensive alternatives. We look forward to working with the administration to ensure Americans have access to the credit they need.
On the other hand, Hawley praised the decision and wrote of X: “Fantastic idea. Can’t wait to vote for it.”
