Trump Proposes 10% Credit Card Rate Cap, Offers No Enforcement Plan

United States President Donald Trump has called for a one-year cap on credit card interest rates at 10%, starting January 20, 2026. However, he has not explained how the proposal would be enforced or whether it would require approval from Congress.

“Please be informed that we will no longer let the American public be 'ripped off' by credit card companies that are charging interest rates of 20 to 30%,” Trump wrote on Truth Social.

Trump said the move is aimed at improving affordability for Americans, while the White House took to X to describe the announcement as “HUGE”.

This comes as the President had made a similar promise during his 2024 election campaign. However, analysts had said at the time that such a move would require legislation passed by Congress, according to a Reuters report.

Notably, several proposals have been introduced in Congress in recent years regarding the same matter. Democratic Senator Bernie Sanders and Republican Senator Josh Hawley had earlier jointly introduced legislation to cap credit card interest rates at 10% for five years. A similar proposal was also introduced in the House by Democratic Representative Alexandria Ocasio-Cortez and Republican Congresswoman Anna Paulina Luna.

Democratic Senator Elizabeth Warren criticised Trump’s announcement, saying it lacked substance without congressional action.
“Begging credit card companies to play nice is a joke. I said a year ago if Trump was serious I’d work to pass a bill to cap rates. Since then, he’s done nothing but try to shut down the Consumer Financial Protection Bureau (CFPB)," Warren said.

"Trump doesn’t care about affordability. Americans know a fraud when they see one,” she added.

The proposal also drew criticism from the banking industry. In a joint statement, the Consumer Bankers Association, Bank Policy Institute, American Bankers Association, Financial Services Forum and Independent Community Bankers of America said such a cap would “reduce credit availability” and push consumers toward “less regulated, more costly alternatives”.

Billionaire fund manager Bill Ackman, who endorsed Trump in the last election, also criticised the proposal. “Without being able to charge rates adequate enough to cover losses and to earn an adequate return on equity, credit card lenders will cancel cards for millions of consumers who will have to turn to loan sharks for credit at rates higher than and on terms inferior to what they previously paid,” Ackman said on X.

This comes against the backdrop of recent regulatory changes. Last year, the Trump administration moved to scrap a rule introduced during former President Joe Biden’s term that capped credit card late fees at $8.

The administration had asked a federal court to strike down the rule, arguing it was illegal and siding with business and banking groups. A federal judge later overturned the regulation, according to Reuters.