This proposal is framed as a measure to combat the soaring interest rates that many Americans face on their credit card balances, which often exceed 20%. The announcement coincides with rising concerns over affordability, a key issue for voters as the 2024 election draws closer.
The proposed interest rate cap is the latest in a series of populist measures Trump has advocated for to address economic pressures on American families. However, despite its appeal to many struggling households, the plan has faced both support and pushback, with some lawmakers warning it could have unintended consequences for credit access. According to Trump’s statement on his social media platform Truth Social, the cap will shield Americans from being “ripped off” by credit card companies, which he claims have profited off high-interest rates that disproportionately affect working-class individuals.
Bipartisan Support for Credit Card Reform
The call for a cap on credit card interest rates has found support across the political spectrum. Senator Bernie Sanders, a prominent critic of Wall Street, and Senator Josh Hawley, a Republican from Missouri, previously introduced legislation aimed at capping credit card interest rates at 10% for five years. Sanders reiterated his backing of Trump’s plan on social media, stressing the need to limit credit card companies’ ability to impose exorbitant charges.
In the House of Representatives, bipartisan bills have also been proposed to limit credit card interest rates, with Democratic Representative Alexandria Ocasio-Cortez and Republican Anna Paulina Luna championing the cause. Lawmakers on both sides have raised alarms about the growing levels of credit card debt, which the Federal Reserve reports has hit record highs. According to the Federal Reserve Bank of New York, Americans owed $1.23 trillion in credit card balances in the third quarter of 2025, underscoring the urgency of addressing the issue.
However, critics argue that while the proposal may alleviate immediate financial strain for some, it may also reduce credit availability. According to the Bank Policy Institute, capping interest rates could result in banks scaling back on credit card offerings, particularly to individuals with lower credit scores. This could lead to many consumers losing access to credit entirely or being forced to turn to more expensive and less regulated alternatives, such as payday loans. Financial experts warn that such a policy might exacerbate the financial challenges it seeks to address.
The Political and Economic Backlash
While Trump’s proposal taps into voter frustrations over affordability, it has drawn backlash from some quarters, especially within the financial industry. The American Bankers Association and other banking groups have voiced concerns that a 10% cap would stifle credit availability and damage small businesses that rely on credit card transactions. These groups argue that by limiting banks’ ability to charge higher interest rates, the policy could drive financial institutions to impose stricter lending standards, ultimately making credit harder to obtain for many consumers.
Furthermore, critics point out the contradiction in Trump’s stance, given his administration’s past moves to deregulate financial institutions. In 2025, the Trump administration sought to eliminate a rule introduced by the Biden administration that capped credit card late fees at $8, citing concerns from business groups. According to the Financial Services Forum, a coalition of financial industry groups, a cap on credit card rates would ultimately harm consumers by reducing their access to affordable credit, pushing them toward more predatory options.
While the debate over credit card interest rates continues, Trump’s proposal highlights the ongoing tension between regulatory measures aimed at consumer protection and the interests of the financial industry. Whether or not the president’s plan gains traction in Congress, it has ignited a broader conversation about the role of credit in Americans’ lives and the balancing act between affordability and financial stability
