On the evening of January 9, U.S. President Donald Trump suggested imposing a 10% cap on credit card interest rates for a year. While this move appears to be an attempt to secure votes ahead of the January 3 midterm elections, the government lacks the authority to regulate credit card interest rates.
Proposal to cap credit card interest rates at 10% for one year
Trump made this proposal in a post on his social media platform, Truth Social, stating the need to address the American voters’ concerns about living costs.
He suggested implementing this interest rate cap of 10% for a year starting from January 20, which marks the first anniversary of his presidency.
Trump stated, “We will no longer let the American Public be “’ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30.” He added, “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%.”
The Financial Times (FT) reported that while it remains unclear whether Trump will pursue specific regulations to enforce the interest rate cap, the White House has refrained from commenting.
According to the Federal Reserve Bank of St. Louis, credit card debt has already reached approximately 1.1 trillion USD, with average interest rates hovering around 20%.
Core supporters express concerns: “More harm than good”
Trump’s proposal has raised concerns even among his key supporters.
Billionaire investor Bill Ackman, founder of hedge fund Pershing Square, criticized the proposal on social media. While acknowledging the merit of lowering credit card interest rates, he warned that setting a 10% cap could be dangerous. Ackman argued, “My concern about capping rates at 10% is that doing so will inevitably cause millions of Americans to have their cards cancelled as credit card companies lose the ability to adequately price subprime credit risk.”
Ackman, formerly a Democratic supporter, has shifted to backing Trump in the 2024 presidential election.
Banking lobby groups also voiced their concerns in a joint statement, arguing that good intentions don’t always lead to positive outcomes. Referring to evidence, they warned that a 10% interest rate cap would lead to reduced credit availability and drive consumers to less regulated lenders with higher costs.
Failed legislation attempt in February last year
Setting a cap on credit card interest rates was one of Trump’s 2024 presidential campaign promises.
Ironically, a similar proposal was introduced in February last year by independent Senator Bernie Sanders (Vermont), known for his left-wing leanings, and Republican Senator Josh Hawley (Missouri), who are typically on opposite sides of Trump. They proposed setting a 10% cap on credit card interest rates, but the legislation failed to pass.
Trump seeks to shift focus by pressuring corporations
Trump’s proposal to cap credit card interest rates at 10% comes as he intensifies pressure on businesses ahead of the midterm elections.
On January 7, Trump announced plans to prohibit large institutional investors like private equity and hedge funds from purchasing single-family homes in the U.S. He emphasized that these investors’ bulk purchases of homes for rental purposes are driving up housing prices, making the quintessential “American Dream” of homeownership increasingly unattainable.
On the same day, he also ordered U.S. defense contractors to stop using profits from government procurement for share buybacks or dividends. Trump stressed that these profits should be reinvested in facilities and research and development (R&D) instead and warned that companies failing to comply would be barred from government procurement contracts.
Trump’s corporate pressure tactics are seen as a strategic move to secure victory in the midterm elections.
These efforts to win back public support by squeezing corporations come amid nationwide anti-Trump protests following the shooting death of Renae Nicole Good, a 37-year-old mother of three children, by Immigration and Customs Enforcement (ICE) officers in Minneapolis, Minnesota.
Another move to appeal to midterm voters was the recent U.S. military operation on January 3 in Venezuela, the world’s largest oil reserve holder. This resulted in the extradition of Venezuelan President Nicolas Maduro and his wife to the United States, effectively secured U.S. rights to Venezuelan oil development to lower U.S. gas prices.
