Trump proposes one-year 10% cap on credit card interest, prompting market and expert concern

Time reports President Donald Trump has proposed a one-year cap on credit card interest rates at 10%, saying the change would take effect on Jan. 20.

The announcement coincided with early trading drops for some U.S. credit card companies when the New York Stock Exchange opened, with American Express, Visa and Capital One turning lower and Capital One down about 6% by midday, the outlet said. Trade associations for the banking industry issued a joint statement warning a 10% cap “would reduce credit availability and be devastating for millions of American families and small businesses,” and argued it could “drive consumers toward less regulated, more costly alternatives.” The average U.S. credit card rate is roughly 20%, meaning the proposed cap would halve typical charges for a year.

Key details remain unresolved: Trump did not specify how a cap would be implemented or whether it would apply to existing accounts, and the White House was contacted for comment. Economic experts quoted in the reporting warned a short-term rate cut might give heavily indebted consumers breathing room but could also distort market signals and prompt banks to restrict lending to riskier borrowers, potentially pushing people toward costlier, less regulated lenders. The report notes bipartisan legislation with a similar temporary 10% cap has previously been introduced and was referred to the Senate Banking Committee.

Key Topics

Politics, Donald Trump, Interest Rate Cap, Credit Card Companies, Capital One, American Express