Trump Pledges 10% Credit Card Interest Rate Cap: A Shock to the $1.2T Debt Market

America's $1.23 trillion debt mountain is about to face a seismic shift. President-elect Donald Trump just vowed to slash credit card interest rates to a maximum of 10% for one year. The plan, announced via Truth Social and confirmed during remarks on Air Force One, is set to take effect on January 20, 2026, the date of his inauguration.

Trump's 10% Credit Card Interest Rate Cap Plan and Economic Context

According to the Federal Reserve Bank of New York, outstanding credit card debt reached $1.23 trillion in September. As of August, the average interest rate stood at 22.83%, a massive jump from 16.28% in 2020. Trump argues that Americans are being "ripped off" by credit card companies that have "abused the public."

Supporters of the move, such as Brian Shearer from the Vanderbilt Policy Accelerator, estimate that a 10% ceiling could save consumers $100 billion annually. It's seen as a direct relief measure for households struggling with the cost of living, which remains a primary concern for voters ahead of the midterm elections.

Legal Hurdles and Industry Backlash: Will it Pass?

The path to implementation isn't simple. Experts note that Trump can't legally cap rates through executive action alone; he'll need Congress to pass legislation. While bipartisan interest exists—exemplified by a proposal from Senators Bernie Sanders and Josh Hawley—the banking industry is fighting back fiercely.

The Electronic Payments Coalition (EPC) warned that over 80% of accounts could be restricted or closed, potentially cutting off credit for 175 million customers. They argue that such a cap would create "credit deserts," citing research from Arkansas where a state-level cap led to reduced financial services for low-income residents.