In a significant announcement this week, former President Donald Trump proposed a one-year cap limiting credit card interest rates to 10%, a move that has sparked mixed reactions from both lawmakers and financial experts. Trump made the declaration via social media, stating the cap would take effect on January 20, the anniversary of his administration’s historic successes. However, he left many questions unanswered regarding the implementation and enforcement of this restriction on credit card companies.
In his post, Trump expressed his commitment to protect the American public from what he termed exploitative interest rates, which can range from 20% to even higher levels. “Please be informed that we will no longer let the American Public be ‘ripped off’ by Credit Card Companies,” he wrote, criticizing the financial practices that thrived during the Biden Administration.
The announcement comes on the heels of a rising credit card debt crisis in the U.S., which has soared to over $1.1 trillion, recently hitting $1.17 trillion in the third quarter of 2024. During his second campaign for the presidency, Trump had vowed to address this issue by capping interest rates, but his previous pledge saw little action until now.
In light of Trump’s proposal, Senators Bernie Sanders and Josh Hawley had previously attempted to tackle the issue by introducing a bipartisan bill in February 2025 aimed at capping interest rates at 10% over the next five years. They argued that exorbitant interest rates are more akin to extortion than financial service, asserting that working families require relief from these burdensome costs. However, their proposal faced significant resistance from banking organizations and has made little headway in Congress.
Just prior to Trump’s announcement, Senator Sanders publicly criticized him for failing to fulfill his promise, stating, “Trump promised to cap credit card interest rates at 10% and stop Wall Street from getting away with murder,” indicating a perceived inconsistency in Trump’s financial policies.
Financial industry reaction to Trump’s plan has been largely negative. Notably, billionaire hedge fund manager Bill Ackman raised concerns over the potential consequences of the cap, warning that credit card companies might react by canceling consumer cards if they cannot charge fees that are sufficient to cover risks and yield profits. Initially voicing strong opposition, Ackman later softened his stance, acknowledging the significance of reducing interest rates while maintaining reservations about the feasibility of the 10% cap.
Senator Elizabeth Warren also voiced skepticism regarding Trump’s capability to enact such a cap without congressional approval, calling his proposal disingenuous. “Begging credit card companies to play nice is a joke,” she remarked, expressing doubt about Trump’s focus on affordability and consumer protection.
Moreover, prominent financial organizations such as the Bank Policy Institute and the American Bankers Association issued a statement cautioning against the proposed rate cap. They asserted that while they share the president’s goal of accessible credit, the cap could hinder credit availability, adversely affecting consumers and small business owners who depend on credit cards.
In contrast, Senator Hawley expressed support for Trump’s announcement, describing it as a “fantastic idea” and expressing eagerness to vote in favor of it.
The discourse surrounding Trump’s proposal underscores the complexities involved in addressing consumer finance issues and the inherent challenges in balancing consumer protection with the realities of financial service provision. As public and legislative responses unfold, the impact of Trump’s announcement on credit access and borrowing costs remains to be seen.
