NEW YORK (QUANTA) — Reviving his campaign promise, President Donald Trump has announced a proposal to impose a one-year, 10% cap on credit card interest rates. This initiative could potentially save Americans tens of billions of dollars, though it has drawn swift criticism from the banking industry, which has historically supported him.
In a recent social media post, Trump did not provide details on whether the cap would come from executive action or legislation. Yet, he did mention that he had spoken with a Republican senator who expressed readiness to collaborate on a bill with Trump's backing, intending for the cap to be in effect by January 20, the first anniversary of Trump’s reelection to office.
Financial analysts have estimated that this cap could save Americans almost $100 billion annually in interest payments if implemented. Although the credit card industry would likely face significant revenue losses, experts believe it would still remain profitable, albeit possibly reducing certain perks associated with credit card use.
Currently, Americans face average interest rates between 19.65% to 21.5% on credit cards, according to the Federal Reserve. These rates have decreased slightly in the past year but remain near historic highs since tracking began in the mid-1990s.
Opponents of the proposed cap, including the American Bankers Association, argue that such a measure would drive consumers towards more costly and less regulated credit options. In a joint statement, they emphasized that it could have unintended consequences for American consumers.
Notably, while the administration has previously aligned with banking interests, this proposal marks a significant shift that could reshape the landscape of credit card lending. Key Senators, including Bernie Sanders and Josh Hawley, have previously proposed similar legislation advocating for a 10% cap, indicating potential bipartisan support for this kind of consumer protection.
As the debate unfolds, Trump’s proposal is likely to further polarize opinions on financial regulation and consumer rights, with ongoing discussions on its feasibility and impact on the credit industry.
