President Donald Trump put the credit card industry on notice Friday night, calling for a one-year cap on interest rates at 10 percent. The announcement takes direct aim at lenders charging Americans 20 to 30 percent while posting their highest profits in decades.
“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,” Trump wrote on Truth Social. “AFFORDABILITY!”
The cap would take effect January 20—the one-year anniversary of Trump’s return to the White House. With current rates averaging over 20 percent according to Federal Reserve data, the proposal would slash borrowing costs roughly in half for millions of Americans carrying balances.
The banking industry responded within hours. Five major trade groups—the Bank Policy Institute, American Bankers Association, Consumer Bankers Association, Financial Services Forum, and Independent Community Bankers of America—issued a joint statement warning the cap “would reduce credit availability and be devastating for millions of American families.”
Their argument follows a familiar script: banks cannot profitably lend to higher-risk borrowers at lower rates, and caps would force them to cut off credit to consumers who need it most. They cite Illinois, where a 36 percent APR cap in 2021 led to a 38 percent reduction in loans to subprime borrowers within six months.
Billionaire hedge fund manager Bill Ackman, a Trump supporter in 2024, called the proposal a “mistake” that would drive consumers toward “loan sharks.”
The industry’s own numbers undercut that narrative. Consumer Financial Protection Bureau data shows credit card companies charged Americans $130 billion in interest and fees in 2022. Return on assets for major issuers hit 5.9 percent that year—up from 4.5 percent in 2019—with 2021 reaching nearly 7 percent, the highest since at least 2000. The average APR margin above the prime rate reached an all-time high, costing borrowers an estimated $25 billion in excess interest in 2023 alone.
Rates nearly doubled from 12.9 percent in 2013 to over 22 percent today—despite stable default rates and no increase in high-risk borrowers. Market concentration explains part of it: the top 10 credit card companies control 83 percent of all outstanding balances. Smaller issuers consistently offer rates 8 to 10 percentage points lower than the giants, regardless of borrower credit scores.
A September 2025 Vanderbilt Policy Accelerator study found that a 10 percent cap would save Americans $100 billion annually. Borrowers across all risk categories generate sufficient profits for banks to absorb substantial rate cuts without eliminating credit access, the study concluded.
Legislation already exists to deliver Trump’s vision. Senator Josh Hawley, a Missouri Republican and Trump ally, teamed with Senator Bernie Sanders in February 2025 to introduce S.381, capping rates at 10 percent for five years. Representatives Alexandria Ocasio-Cortez and Anna Paulina Luna introduced companion legislation in the House.
Hawley’s response to Trump’s announcement was immediate: “Fantastic idea. Can’t wait to vote for this.”
The bipartisan alignment is striking. Hawley called current rates “exploitative” and accused credit card issuers of “hiking their interest rates to the moon” while working Americans drown in debt. Total credit card balances now exceed $1.2 trillion—the highest ever measured.
Trump has defied skeptics before. Those who dismissed his tariff threats, deportation pledges, and regulatory rollbacks as campaign rhetoric learned otherwise. The banking industry’s unified opposition within hours of his announcement may have painted a target on its own back.
Bipartisan legislation sits ready. Hawley is a reliable Trump ally. The populist case for reining in credit card companies writes itself heading into the 2026 midterms. The industry would be unwise to assume this ends with a Truth Social post.
Twelve hundred dollars in annual interest on a $5,000 balance concentrates the mind. So does a president who keeps his promises.
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