Trump Announces One-Year 10% Cap on Credit Card Interest Rates Amid Business Community Silence

President Donald Trump announced a one-year cap on credit card interest rates, limiting them to 10%, in a move that has sparked mixed reactions from lawmakers and industry groups. The restriction is set to take effect on January 20, coinciding with the one-year anniversary of the Trump administration.

Trump criticized credit card companies for charging rates of 20 to 30% and said the cap will protect consumers from exploitation.

The move aligns with Trump's broader campaign promises to reduce borrowing costs. During his campaign, he pledged to implement a 10% cap to address the growing burden of credit card debt, which reached $1.17 trillion in the third quarter of 2024. Lawmakers like Sen. Josh Hawley and Sen. Bernie Sanders previously introduced a similar bill in 2025 but failed to gain traction in Congress.

Credit card companies and banking groups have raised concerns about the potential consequences of the cap. They warn that the policy could reduce credit availability and push consumers toward less regulated alternatives. The Bank Policy Institute and the American Bankers Association argue that a 10% rate cap could eliminate or curtail access to credit for millions of households, particularly those with subprime credit scores.

Why Did This Happen?

The announcement reflects Trump's broader strategy to address affordability issues for American consumers. Earlier in the week, Trump directed the federal government to buy $200 billion in mortgage bonds to lower mortgage rates. These actions are part of a larger effort to reshape the financial landscape and reduce the cost of borrowing.

According to Federal Reserve officials, Atlanta Fed President Raphael Bostic and Richmond Fed President Thomas Barkin argue that housing affordability is more closely tied to supply issues than financing costs. They emphasize that a multifaceted approach is needed to address the affordability crisis.

What Are Analysts Watching?

Analysts are monitoring the potential ripple effects of the credit card rate cap. Billionaire investor Bill Ackman initially criticized the move, warning that credit card lenders might cancel cards for millions of consumers if they cannot charge adequate interest rates. However, Ackman later expressed support for the goal of reducing credit card rates and urged policymakers to find a way to balance affordability with credit availability.

The business community has been largely silent on the proposal. Critics argue that Trump's approach risks politicizing the Federal Reserve and undermining its independence. Federal Reserve Chair Jerome Powell has been accused of facing political pressure, with some lawmakers warning that such pressure could harm the Fed's credibility.

How Did Markets React?

Markets responded positively to the news, with the S&P 500 and Nasdaq reaching record highs in the first full trading week of 2026. Despite the uncertainty caused by Trump's social media posts and the DOJ investigation into Powell, investors appeared to remain confident. The market's resilience suggests that traders are discounting the likelihood of significant changes to monetary policy.

However, the long-term impact of Trump's policies on the financial sector remains uncertain. While some lawmakers have praised the move as a step toward financial relief for working families, others warn that it could lead to unintended consequences. The debate over credit card interest rates is likely to continue as the administration seeks to implement its economic agenda.