Trump Calls for 10% Credit Card Interest Rate Cap Despite Bank Opposition

President Revives Campaign Promise

President Donald Trump announced on Truth Social that he is "calling for a one year cap on Credit Card Interest Rates of 10%" effective January 20, 2026 , exactly one year after his inauguration. Trump wrote that Americans "will no longer be ripped off by Credit Card Companies that are charging Interest Rates of 20 to 30%" , reviving a pledge he made during his 2024 campaign.

The president did not provide details on how his plan would come to fruition or how he planned to make credit card companies comply , leaving uncertainty about whether this would require congressional action or could be implemented through executive measures. Senator Roger Marshall, who spoke with Trump Friday night, said the effort aims to "lower costs for American families and to reign in greedy credit card companies who have been ripping off hardworking Americans for too long" .

Current credit card rates present a stark contrast to Trump's proposed cap. Americans are paying, on average, between 19.65% and 21.5% in interest on credit cards according to the Federal Reserve and other industry tracking sources . That's significantly higher than a decade ago, when the average credit card interest rate was roughly 12% .

Industry Pushback and Economic Concerns

The banking industry immediately opposed Trump's proposal with a unified response. The American Bankers Association and allied groups warned that "if enacted, this cap would only drive consumers toward less regulated, more costly alternatives" . Banks argue that such a plan would most hurt poor people by curtailing or eliminating credit lines, driving them to high-cost alternatives like payday loans or pawnshops .

Research shows that an interest rate cap of 10% would likely result in banks lending less to those with credit scores below 600 . The Bank Policy Institute estimated that more than 14 million American households that rarely pay their credit card balances in full could have their access to credit eliminated or curtailed by a 10% cap . Even billionaire investor Bill Ackman, who backed Trump in his 2024 campaign, called the idea a "mistake" .

The opposition is particularly striking given the industry's previous support. Wall Street and credit card companies donated heavily to Trump's 2024 campaign and have supported his second-term agenda . Capital One got little resistance from the White House when it finalized its purchase and merger with Discover Financial in early 2025, creating the nation's largest credit card company .

Potential Consumer Impact

Supporters argue the cap could deliver massive savings to American households struggling with debt. Researchers who studied Trump's campaign pledge found that Americans would save roughly $100 billion in interest a year if credit card rates were capped at 10% . Americans owed a total of $1.23 trillion in credit card balances in the third quarter of last year, the highest level on record , with the average U.S. household with credit card debt owing $10,563 .

Brian Shearer, director of competition and regulatory policy at the Vanderbilt Policy Accelerator, argues that "the few large banks that dominate the credit card market are making absolutely massive profits on customers at all income levels" . Some researchers contend that banks earn enough revenue from merchants to keep them profitable if interest rates were capped .

However, the same researchers found that while the credit card industry would take a major hit, it would still be profitable, although credit card rewards and other perks might be scaled back . This echoes historical precedent where when Congress enacted a cap on debit card fees, banks responded by removing all rewards and perks from those cards .

Political Reality and Next Steps

The proposal faces significant implementation challenges despite bipartisan interest in addressing high credit card rates. Senator Elizabeth Warren criticized Trump's call as meaningless without congressional action, saying "Begging credit card companies to play nice is a joke" . Senators Bernie Sanders and Josh Hawley released a plan in February that would immediately cap interest rates at 10% for five years, hoping to use Trump's campaign promise to build momentum .

Trump made this pledge during the 2024 campaign, but analysts dismissed it at the time, saying such a step required congressional approval . With Republicans currently holding a narrow majority in both the Senate and the House of Representatives , the proposal's fate will depend on whether Trump can convince his own party to support a measure that directly challenges one of their key donor constituencies.

This announcement represents a significant test of Trump's populist economic agenda versus traditional Republican business interests, with millions of debt-burdened Americans watching to see if campaign promises translate into legislative action.