Trump Claims Credit Card Companies Break the Law Without Interest Rate Limits

Trump Urges Credit Card Interest Rate Cap

Photographer: Samuel Corum/Getty Images

During a conversation with reporters aboard Air Force One on Sunday, President Donald Trump insisted that credit card companies must limit their interest rates to 10% for a full year. He warned that any lender failing to comply by January 20 would be considered to be breaking the law.

Trump reiterated his stance, emphasizing that some card issuers currently charge rates as high as 28% or even close to 30%. He expressed concern that many consumers are unaware of the high rates they are paying, stating, "People are working hard and don't realize they're being charged 30%."

He accused major credit card companies of taking advantage of their customers, saying, "They really abused the credit cards."

Despite his strong statements, Trump did not reference any legislative action to support his demand, nor did he clarify how lenders would be violating the law by not following his directive.

Market Impact and Industry Response

Trump's remarks have put several major credit card issuers, including JPMorgan Chase & Co., Capital One Financial Corp., and Citigroup Inc., under scrutiny. In London, Barclays Plc, which operates a US credit card division, saw its shares drop by 4.2% as of 8:20 a.m.

Interest rates on credit cards have remained above 20% in recent years, drawing criticism from lawmakers across the political spectrum. While some have proposed legislation to lower rates, these efforts have faced strong opposition from the banking industry. Trade groups warn that capping rates could threaten banks' profitability and potentially push vulnerable Americans toward payday lenders and pawn shops if access to credit is reduced.

In response to Trump's proposal, organizations such as the Bank Policy Institute and Consumer Bankers Association issued a joint statement. They said, "We share the president’s goal of making credit more affordable for Americans. However, evidence suggests that a 10% cap would actually limit credit availability and could harm millions of families and small businesses who depend on their credit cards—the very people this proposal aims to help."

Reporting assistance by Paige Smith.

Latest update includes information on lenders and Barclays' share price.

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