President Trump is calling for a 10% cap on credit card interest rates for one year, an idea that has drawn strong support from lawmakers in both parties but pushback from card issuers.
“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%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration,” the president wrote on Truth Social late Friday.
Mr. Trump said the cap on interest rates should begin on Jan. 20, 2026, or the one-year anniversary of his second inauguration.
Credit card interest rates currently average over 20%, according to Federal Reserve statistics, so a 10% cap would represent a significant cut in borrowing costs.
It’s unclear if the president will attempt to enforce his proposed 10% cap through some kind of executive action, or if his goal is to pressure credit card issuers to slash their rates voluntarily. CBS News has reached out to the White House and some of the largest credit card issues in the U.S. for comment.
The idea of capping credit card interest rates has drawn bipartisan support. Last year, Republican Sen. Josh Hawley of Missouri and independent Sen. Bernie Sanders of Vermont, who caucuses with Democrats, teamed up to introduce legislation that would impose a 10% cap. A similar measure was also introduced in the House by Democratic Rep. Alexandria Ocasio-Cortez of New York and Republican Rep. Anna Paulina Luna of Florida.
Other recently proposed legislation would impose less stringent caps on fees and interest rates.
Mr. Trump also called for temporarily capping interest rates at 10% on the campaign trail. Hours before the president’s late Friday Truth Social post, Sanders criticized Mr. Trump on X for not following through on his pledge to limit interest rates.
Supporters of the idea say it would aid scores of Americans who are languishing under mountains of credit card debt, and argue that credit card issuers can afford to cut their rates.
Americans owed a total of $1.23 trillion in credit card balances in the third quarter of last year, according to the Federal Reserve Bank of New York. A 2024 study by NerdWallet found that the average U.S. household with credit card debt owed $10,563.
“We cannot continue to allow big banks to make huge profits ripping off the American people,” Sanders said in a joint press release with Hawley last year.
Said Luna: “For too long, credit card companies have abused working class Americans with absurd interest rates, trapping them in an almost insurmountable amount of debt.”
But opponents of a cap, including banks and other credit card issuers, warn that limits on interest rates may force lenders to stop issuing credit cards to many riskier borrowers.
Scott Simpson, CEO of the trade group America’s Credit Unions, told CBS News in a statement late Friday: “While we appreciate the President’s desire to increase affordability, the plain truth is that capping rates at 10% does not make credit more affordable, it makes it unattainable for millions of working Americans because financial institutions will not be able to offer credit cards to most consumers at a 10% rate.”
In an open letter to lawmakers last year, the American Bankers Association said it found in a 2020 analysis that 95% of subprime borrowers — or 65 million accounts — could lose access to credit cards if interest rates were capped at 15%. The group argued that if credit card issuers end up needing to cut off access for “all but the lowest-risk customers,” many people would be forced to shift to “less regulated alternatives” like pawn shops and payday lenders.
“Laws that prevent lenders from charging credit card rates that correlate to a borrowers’ risk profile will lead to less lending and potentially eliminate card options for consumers,” it said.
The push to cap credit card interest rates is the latest proposal by Mr. Trump to cut borrowing costs, as he grapples with widespread concerns about affordability.
Earlier this week, Mr. Trump directed the federal government to buy $200 million in mortgage bonds using cash from Fannie Mae and Freddie Mac, in an effort to drive down mortgage rates.
The president has also urged the Federal Reserve to more aggressively cut its benchmark interest rate, which influences borrowing costs for everything from mortgages and car loans to commercial loans — though rate cuts by the Fed could run the risk of causing inflation to surge.
Mr. Trump is expected to nominate a new Federal Reserve chair in the coming weeks, and told reporters last month he’s “looking for somebody that will be honest with interest rates.”
https://www.cbsnews.com/news/trump-urges-credit-card-companies-to-slash-interest-rates/
