Trump Vows 1-Year Cap on Credit Card Rates at 10 Percent

President Donald Trump made a Friday night announcement that would save hundreds of millions of dollars for the millions of Americans buried in credit card debt.

To celebrate the first anniversary of his second inauguration, Trump wants a one-year cap on credit-card interest rates at 10%.

"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 Friday night on Truth Social.

"AFFORDABILITY!

"Effective January 20, 2026, I, as President of the United States, am calling for a one year cap on Credit Card Interest Rates of 10%.

"Coincidentally, the January 20th date will coincide with the one year anniversary of the historic and very successful Trump Administration.

"Thank you for your attention to this matter. MAKE AMERICA GREAT AGAIN! PRESIDENT DONALD J. TRUMP."

Americans' total credit card debt reached a record $1.23 trillion, with the average household in hock for $9,326.

Americans facing affordability challenges are increasingly using their plastic to pay for basics such as food and housing.

And the cost of such credit is skyrocketing — only making the affordability problem worse.

As of August 2025, the Federal Reserve reported the average interest rate on credit card accounts was 22.83%. Some consumers with low credit scores pay nearly 30%.

During his 2024 presidential campaign, Trump announced he would cap credit card rates at 10%.

The move drew cheers from working-class families groaning under massive debt — and criticism from some banks.

Most states ban such excessive interest rates charged to consumers under what are known as usury laws.

But a small number of states, notably Delaware, have given banks based there wide latitude to charge consumers as much as they want.

Increasingly, there is bipartisan pushback against banks charging excessive rates.

Sens. Josh Hawley, R-Mo., and Bernie Sanders, I-Vt., introduced bipartisan legislation to cap rates at 10% for five years, framing it as immediate relief for working Americans.

Hawley's office called current rates "exploitative" and tied the effort to Trump's campaign promise.

On the House side, Rep. Alexandria Ocasio-Cortez, D-N.Y., joined Rep. Anna Paulina Luna, R-Fla., in introducing similar legislation with a 10% cap.

"For too long, credit card companies have abused working-class Americans with absurd interest rates, trapping them in an almost insurmountable amount of debt," Luna said at the time she proposed the bill.

Luna has noted that banks can still make enormous profits since they borrow from the Federal Reserve at rates around 4%. She says that credit card rates have almost doubled in the past decade, giving banks massive windfalls.

But the Bank Policy Institute, representing major banks, argued such a cap would reduce access to credit for the very consumers most likely to revolve balances.

It estimated that as many as two-thirds of "revolvers" could see credit lines curtailed or eliminated, with disproportionate harm to borrowers with imperfect credit histories.

But critics say the excessively high rates put the poorest borrowers in a "debt trap" — making their payments go almost entirely to interest with little going toward principal.

A comprehensive study by Vanderbilt University's Vanderbilt Policy Accelerator found that credit card companies were charging consumers excessively.

The VPA study found a 15% cap would save consumers $48 billion annually and lead to no real reduction in debt available to consumers.

And a 10% cap would save consumers about $100 billion but reduce some available debt to the public with those having credit scores under 600.

The study found that under these scenarios banks would still make massive profits — but not the excessive windfalls they have been accustomed to.

For example, Capital One, the nation's largest credit card-issuing bank, reported net income of $3.2 billion in the third quarter last year, or an annualized rate of more than $12 billion.

Newsmax writer Charlie McCarthy contributed to this report.