Credit Card Companies Ignore Trump's 10% Interest Rate Cap

Despite a public call from President Donald Trump for credit card companies to implement a 10% interest rate cap, effective January 20, the industry has largely ignored the directive. Trump, in a January 9th post on Truth Social, expressed his intention to stop what he called "ripping off" American consumers by credit card companies charging rates between 20% and 30% or higher. He advocated for a year-long 10% ceiling on these rates.

However, as the January 20th date passed, financial analysts and consumer experts reported no widespread compliance from major card issuers. Stephen Kates, a financial analyst at Bankrate, noted the absence of any official announcements or even subtle indications from the industry that they would be lowering their rates to the proposed level. This news is likely disappointing for consumers who had hoped for a significant reduction in their credit card interest expenses. Kates advised against holding one's breath for such a change.

Trump has maintained his stance on the proposed rate cap, publicly stating on January 12th that card companies failing to adhere to the 10% limit would be considered in violation of the law. Nevertheless, the credit card industry has received different signals from other influential voices in Washington, including Republican leadership and members of the Trump administration.

Consumer advocates generally agree that Trump lacks the executive authority to unilaterally mandate a credit card interest rate cap; such a significant policy shift would necessitate action from Congress. Adam Rust, director of financial services at the Consumer Federation of America, emphasized that this type of change cannot be enacted through a simple pronouncement.

House Speaker Mike Johnson, a Republican, publicly cautioned on January 13th that Trump's proposed cap could lead to "negative secondary effects," potentially limiting credit access for individuals with lower credit scores. Shortly thereafter, Kevin Hassett, director of the National Economic Council, suggested an alternative approach, shifting the focus from a rate cap to the development of a "Trump card" designed for individuals with less-than-ideal credit.

These statements, along with others, signaled to banking and consumer experts that credit card companies felt empowered to disregard Trump's 10% cap. Mike Pierce, executive director of Protect Borrowers, a consumer debt nonprofit, suggested that not only were card companies ignoring the directive, but they were also being implicitly encouraged to do so by senior economic policymakers within the Trump administration.

The banking industry voiced strong opposition to Trump's proposed cap. In a collective response to his Truth Social post, several industry groups issued a joint statement arguing that such a cap would have "devastating" consequences for millions of American families and small businesses who depend on credit cards, thus undermining the very consumers the proposal aimed to assist.

This is not the first time Trump has publicly criticized high credit card interest rates. He also discussed the idea of a 10% cap during his 2024 campaign. Following his re-election, a bipartisan bill co-sponsored by Senators Bernie Sanders (I-Vt.) and Josh Hawley (R-Mo.) was introduced, which included a similar provision. Senator Hawley highlighted the growing burden of credit card debt on working Americans while credit card issuers continued to profit significantly. However, this bill ultimately stalled due to strong opposition from the credit card industry.

Americans currently carry a substantial credit card debt burden, totaling $1.2 trillion as of the third quarter of 2025, according to federal data. Analysis by LendingTree indicates this debt has increased by 60% over the past four years. Leaders within the banking industry attribute this rise in balances to an expanding base of credit card customers, particularly those on the financial margins who are managing their debt responsibly.

Data from Bankrate indicates that average credit card interest rates are currently around 19.6%, nearing their historical peak. The credit card industry argues that a 10% cap would jeopardize their ability to offer credit to consumers with weaker credit histories. They contend that millions of lower-income and financially vulnerable households could lose access to credit cards or face significantly reduced credit limits. Lindsey Johnson, CEO of the Consumer Bankers Association, stated that the consumer experience with credit is not uniform. An industry-commissioned study suggested that a 10% cap could effectively close the credit card market to individuals with credit scores below 740, a group comprising an estimated 175 to 190 million Americans.

Despite the industry's pushback, some, like Adam Rust of the Consumer Federation, commended Trump for initiating a national conversation on the issue, even if his proposed solution was not enacted. Rust believes the positive outcome is the increased public awareness regarding the significant amount of money individuals are spending on credit card debt.