Trump Proposes Capping Credit Card Interest Rates at 10%

President Donald Trump's Plan

President of the United States, Donald Trump, has announced plans to cap credit card interest rates at 10% for one year, starting January 20, the date of his inauguration. Trump, who made this proposal during his electoral campaign, emphasized in a post on Truth Social that Americans are being "sapped" with interest rates reaching as high as 30%.

The Debt Issue

Americans owe a significant amount to credit card companies, with total debt reaching $1.23 trillion, according to data from the Federal Reserve Bank of New York. This figure does not include other common forms of debt, such as auto loans or mortgages. Furthermore, the average interest cost rose to 22.83% in August, a sharp increase from 16.28% in 2020.

Rejection of Credit Card Companies

Trump stated that credit card companies have “abused the public.” While there is bipartisan support in the U.S. for reducing the costs imposed by these companies, experts warn that Trump's plans could lead to unforeseen consequences, such as limiting credit access for some consumers.

Legislative Challenges

For the interest rate cap to be legally mandated, Trump would need Congressional approval. Additionally, he supports the "Credit Card Competition Act of 2023," a bipartisan proposal aimed at addressing hidden fees imposed by Visa and Mastercard.

Benefits and Criticisms of the Plan

The 10% cap could save Americans approximately $100 billion annually, according to some analyses. However, critics suggest that such a measure might restrict lending for individuals with lower credit scores, impacting a large segment of the population.