Trump proposes limiting credit card interest rates to 10% in his newest effort to address affordability issues

Trump Proposes Temporary Limit on Credit Card Interest Rates

A man uses a portable credit card terminal at a restaurant in Manhattan, New York City. Recently, Donald Trump advocated for a one-year cap on credit card interest rates.

On Friday, former President Donald Trump suggested implementing a 10% ceiling on credit card interest rates for one year, arguing that Americans are being unfairly charged. He made this statement in a Truth Social post.

Trump proposed that this cap should take effect on January 20, marking a year since his potential return to office. However, he did not clarify the method for enacting such a cap, nor did he specify whether it would rely on voluntary compliance from credit card companies or require government intervention.

He justified the temporary cap by citing concerns about affordability, an issue that has become increasingly pressing for many Americans and a political challenge for both Trump and the Republican Party. Persistent inflation has intensified financial strain, and Trump attributed the high credit card rates to his predecessor, Joe Biden.

This stance marks a notable shift for Trump, as his administration previously reversed an $8 cap on credit card late fees that had been introduced by the Biden administration. The Consumer Financial Protection Bureau (CFPB) estimated that Biden’s policy would have saved families over $10 billion annually by reducing average fees from $32.

A federal judge initially halted the implementation of that rule in 2024, and Trump’s administration sided with banks that challenged the regulation.

It remains uncertain whether financial institutions would accept Trump’s proposed cap, as interest from credit cards is a major source of their income. Imposing such a limit could prompt lenders to tighten their standards, potentially restricting access to credit for those with lower incomes or weaker credit histories.

Such changes could worsen the so-called K-shaped recovery, where wealthier Americans have benefited from strong stock market returns, rising home values, and increased wages, while lower-income individuals face mounting costs, growing debt, and a weakening job market.

Trump’s announcement regarding credit card rates capped off a week filled with populist economic proposals shared on social media, aiming to persuade Americans of his commitment to addressing affordability. For instance, on Thursday, he mentioned instructing his team to purchase mortgage bonds to reduce housing costs, and on Wednesday, he discussed plans to prohibit institutional investors from buying single-family homes.

Despite these efforts, Trump faces skepticism from the public regarding his progress on affordability. According to a recent CNN survey, 61% of respondents believe Trump’s policies have made the nation’s economic situation worse. Additionally, the New York Federal Reserve recently reported that Americans’ confidence in finding new employment has dropped to a record low, as detailed in their latest report.

Additional Context

The Trump administration has also taken steps to weaken the Consumer Financial Protection Bureau (CFPB), a regulatory agency that oversees the financial sector and handles consumer complaints. The CFPB has long been a target for conservative critics, including Trump.

CNN has contacted both the White House and the American Bankers Association for their perspectives.

This article has been updated to include new information and developments.

Reporting by Matt Egan contributed to this story.