President Donald Trump has called for a one-year cap on credit card interest rates at 10%, reviving a campaign pledge. The proposal was made in a social media post on Friday night.
Trump did not specify whether the cap would be implemented through executive action or legislation. He said he hopes it will be in place by January 20, one year after he took office.
Republican Senator Roger Marshall of Kansas stated he spoke with the president on Friday and would work on a bill with Trump's "full support."
The banking industry and credit card companies, which have heavily supported Trump's campaign and agenda, strongly oppose the plan. In a joint statement, the American Bankers Association and allied groups argued the cap would drive consumers toward less regulated, more costly alternatives like payday loans.
Banks contend such a plan would most hurt poor people by curtailing credit lines, especially during economic concerns.
"We will no longer let the American Public be ripped off by Credit Card Companies that are charging Interest Rates of 20 to 30%," Trump wrote on his Truth Social platform.
Researchers who studied the proposal after it was first announced found Americans would save roughly $100 billion in interest annually if rates were capped at 10%. They noted the credit card industry would still be profitable, though rewards might be scaled back.
According to the Consumer Financial Protection Bureau, about 195 million people in the United States had credit cards in 2024 and were assessed $160 billion in interest charges. The New York Federal Reserve reported Americans are carrying about $1.23 trillion in credit card debt, more than ever before.
Federal Reserve and industry data show Americans pay, on average, between 19.65% and 21.5% in interest on credit cards. Rates have come down in the past year but remain near highs since tracking began in the mid-1990s, significantly higher than the roughly 12% average a decade ago.
The Republican administration has previously been friendly to the credit card industry. Capital One faced little resistance from the White House when it finalized its purchase and merger with Discover Financial in early 2025, creating the nation's largest credit card company. The Consumer Financial Protection Bureau has been largely nonfunctional since Trump took office.
Bank lobbyists argue lowering interest rates would require lending less to high-risk borrowers. They point to when Congress enacted a cap on debit card fees, leading banks to remove rewards, which only recently have trickled back.
The U.S. already places interest rate caps on some financial products. The Military Lending Act makes it illegal to charge active-duty service members more than 36%. The national regulator for credit unions has capped interest rates on credit union credit cards at 18%.
Credit card companies earn revenue from fees charged to merchants, fees charged to customers, and interest on balances. Some researchers and policymakers argue banks earn enough from merchants to remain profitable with an interest rate cap.
"A 10% credit card interest cap would save Americans $100 billion a year without causing massive account closures, as banks claim. That’s because the few large banks that dominate the credit card market are making absolutely massive profits on customers at all income levels," said Brian Shearer, director of competition and regulatory policy at the Vanderbilt Policy Accelerator, who wrote research on the proposal's impact.
Historical examples, like Arkansas's strictly enforced 17% cap, show rate caps can cut off the less creditworthy from financial products. Shearer's research indicated a 10% cap would likely result in banks lending less to those with credit scores below 600.
The White House did not respond to questions about how the president seeks to cap the rate or whether he has spoken with credit card companies.
Senator Marshall said the effort is meant to "lower costs for American families and to reign in greedy credit card companies who have been ripping off hardworking Americans for too long."
Legislation in both the House and Senate aligns with Trump's goal. Senators Bernie Sanders, I-Vt., and Josh Hawley, R-Mo., released a plan in February to immediately cap rates at 10% for five years, hoping to use Trump's promise to build momentum.
Hours before Trump's post, Sanders said the president had taken steps to deregulate big banks, allowing them to charge higher fees, rather than working to cap interest rates.
Representatives Alexandria Ocasio-Cortez, D-N.Y., and Anna Paulina Luna, R-Fla., have proposed similar legislation. Ocasio-Cortez is a frequent political target of Trump, while Luna is a close ally.