Washington, D.C. – January 10, 2026
President Donald Trump has renewed his call for a temporary cap on credit card interest rates, proposing a nationwide limit of 10% for one year starting January 20, 2026. The announcement, made through a late-night Truth Social post, targets what Trump calls “out-of-control” interest rates that he says are crushing American families.
At a time when U.S. credit card debt has surged to a record $1.23 trillion, the proposal has reignited a heated debate in Washington. According to recent Federal Reserve data, the average American household now carries about $9,326 in credit card debt, while average interest rates hover above 22%, with some borrowers paying close to 30% APR.
Trump’s message was blunt. He accused credit card companies of “ripping off” consumers and argued that years of unchecked rate increases have made everyday life unaffordable for millions of people who rely on credit cards for essentials like groceries, rent, and medical bills.
Why the Proposal Is Gaining Attention Now
Inflation may have cooled slightly, but household budgets remain tight. Nearly 47% of Americans carry a balance on their credit cards every month, meaning interest charges pile up quickly and payments often barely reduce the original debt.
Supporters say a 10% cap could provide immediate relief. A study from Vanderbilt’s Policy Accelerator estimates that such a cap could save consumers up to $100 billion per year in interest payments. Even a higher cap of 15%, researchers say, would still save households around $48 billion annually while keeping most credit available.
Trump’s timing also reflects a broader populist push on affordability. Earlier this week, he announced efforts aimed at lowering housing costs, including mortgage bond purchases and restrictions on large investors buying single-family homes. Together, these moves signal a renewed focus on cost-of-living issues ahead of the 2026 midterm elections.
A Campaign Promise Returns—With Bipartisan Support
This is not a new idea for Trump. He first proposed a 10% interest rate cap during a campaign rally in September 2024, calling high credit card rates a “debt trap for working families.”
What makes the issue unusual is the rare bipartisan agreement forming around it.
In the Senate, Josh Hawley (R-MO) and Bernie Sanders (I-VT) have introduced the 10 Percent Credit Card Interest Rate Cap Act, which would impose a five-year cap on rates nationwide. In the House, Alexandria Ocasio-Cortez (D-NY) and Anna Paulina Luna (R-FL) are backing similar legislation.
Supporters argue that banks borrow money from the Federal Reserve at roughly 4%, yet often charge consumers five to seven times that amount. They say the gap has widened dramatically over the past decade while bank profits have soared.
Representative Luna summed it up by saying that credit card companies have “trapped working-class Americans in cycles of debt with absurd interest rates.”
Critics Point to Mixed Signals From the White House
Despite the renewed push, critics question Trump’s consistency. Shortly after taking office, his administration rolled back an $8 cap on credit card late fees introduced under President Biden. The Consumer Financial Protection Bureau (CFPB) estimated that rule would have saved families more than $10 billion a year.
Senator Sanders openly criticized the move, noting that while Trump promised relief from high interest rates, he also loosened regulations on large banks. Senator Elizabeth Warren went further, calling the proposal “meaningless” without clear legislation and enforcement.
So far, Trump has not explained how the cap would be enforced. It remains unclear whether he expects voluntary compliance from credit card issuers, plans to use executive authority, or will rely on Congress to act.
Legal experts widely agree that Congressional approval would likely be required to impose a binding national interest rate cap.
Banking Industry Pushes Back Hard
The banking industry has responded with strong opposition.
Major financial groups warn that a strict 10% cap could reduce access to credit, especially for borrowers with lower credit scores. The Bank Policy Institute claims that as many as two-thirds of consumers who carry balances could see their credit limits reduced or accounts closed.
Their argument centers on risk. Banks say higher interest rates help offset losses from missed payments. Without that flexibility, they argue, lenders may simply stop issuing cards to higher-risk borrowers, pushing them toward payday loans or illegal lenders.
Billionaire investor Bill Ackman called the proposal “a serious mistake,” warning that millions of consumers could lose access to mainstream credit altogether.
Visa and Mastercard also urged policymakers to focus on financial access rather than strict caps, saying small businesses and consumers could suffer unintended consequences.
The Consumer Reality
From a consumer perspective, the pressure is real. Roughly 74% of Americans have at least one credit card, and cards account for nearly 70% of retail spending. In 2022 alone, credit card companies collected more than $105 billion in interest.
Low-income households are hit the hardest, often paying the equivalent of 40% or more once fees and compounding are factored in. For these families, even a small reduction in interest rates could mean the difference between making progress or falling further behind.
Globally, U.S. rates are high but not extreme. In countries like India, some credit cards charge rates above 40%, a fact critics use to argue that caps can backfire. Still, consumer advocates counter that American banks remain highly profitable even with lower rates.
What Comes Next
As January 20 approaches—the one-year anniversary of Trump’s second inauguration—attention is turning to what happens next.
Without new legislation, the proposal remains more political signal than policy. Bipartisan bills exist in both the House and Senate, but none have yet passed, despite Republican control of Congress.
If enacted, supporters believe the savings could free up billions of dollars for consumer spending or debt repayment. Opponents warn of tighter credit and unintended harm to vulnerable borrowers.
For now, the debate highlights a familiar tension in American finance: protecting consumers from high costs while keeping credit widely available.
Trump ended his post with a single word in all caps: “AFFORDABILITY!” Whether that message turns into real relief—or remains a campaign talking point—will depend on what Congress and the banking industry do next.
The debt clock, meanwhile, keeps ticking.
