What Trump’s Proposed 10% Credit Card Interest Rate Cap Means for Consumers
On January 9, 2026, President Donald Trump announced on Truth Social a call for a one-year cap on credit card interest rates at 10%, set to take effect on January 20, 2026—the one-year anniversary of his second inauguration. Reviving a pledge from his 2024 presidential campaign, Trump declared that Americans would “no longer [be] ‘ripped off'” by rates of 20% to 30% or higher, which he blamed on the previous administration. The proposal aims to address affordability concerns amid record-high credit card debt and persistent high borrowing costs.
The Current Landscape of Credit Card Rates
As of early 2026, credit card interest rates remain elevated. According to the Federal Reserve’s most recent data (November 2025), the average APR for all credit card accounts stands at approximately 20.97%, while the rate for accounts assessed interest is around 22.30%. Industry sources like WalletHub and LendingTree report averages for new offers in the 22–23% range, with some cards reaching up to 36% for higher-risk borrowers. This marks a significant increase from pre-pandemic levels and contributes to substantial interest payments for the millions of Americans carrying balances.
Total U.S. credit card debt has surpassed $1.2 trillion, and nearly half of cardholders revolve balances month to month, leading to compounding costs. For example, someone with a $6,000–$7,000 balance at current rates could face roughly $100 or more in monthly interest alone.
Potential Benefits for Consumers
If implemented, a 10% cap would dramatically lower borrowing costs for most cardholders. Analyses of similar proposals suggest Americans could save tens of billions—potentially up to $100 billion annually—in interest charges. This relief would be especially meaningful for those with revolving debt, allowing faster payoff, reduced financial stress, and more disposable income for everyday expenses or savings.
The idea has garnered bipartisan interest in Congress. Legislation to cap rates at 10% (for longer periods, such as five years) has been introduced by figures including Sens. Bernie Sanders (I-Vt.) and Josh Hawley (R-Mo.), as well as Reps. Alexandria Ocasio-Cortez (D-N.Y.) and Anna Paulina Luna (R-Fla.). Trump’s announcement highlights ongoing debates about consumer protection in a high-debt environment.
Industry Concerns and Potential Drawbacks
The banking sector has responded swiftly and critically. Major trade groups, including the American Bankers Association and Bank Policy Institute, issued a joint statement warning that a 10% cap would “reduce credit availability” and prove “devastating” for millions of families and small businesses reliant on cards. Banks argue that higher rates are necessary to offset default risks, particularly for subprime borrowers with lower credit scores.
A cap could lead to:
- Reduced credit limits or account closures
- Stricter approval standards
- Elimination of rewards programs and perks
Critics, including some analysts and figures like Bill Ackman, suggest this might push consumers toward riskier, less regulated alternatives such as payday loans or buy-now-pay-later services, which often carry even higher effective costs. Financial stocks, including those of Capital One, JPMorgan Chase, and others, declined sharply following the announcement, reflecting investor concerns over lost revenue.
Feasibility and Next Steps
Trump’s post did not specify enforcement mechanisms—whether through executive action, voluntary compliance, or legislation. Experts widely agree that a binding cap would require Congressional approval, as the president lacks unilateral authority to impose such limits on private lenders. With the proposed start date just days away (January 20, 2026), swift implementation appears unlikely without rapid legislative action.
While the proposal underscores affordability as a priority, its path forward remains uncertain amid industry opposition and the complexities of credit markets. For now, it serves as a high-profile reminder of the tension between easing consumer burdens and maintaining broad access to credit in an economy where many households rely on cards for liquidity. As developments unfold, the outcome could significantly influence household finances, banking practices, and political debates on financial regulation.
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