President Trump Calls for One-Year 10% APR Cap on Credit Card Interest Rates

Last week, President Donald Trump called for a one-year cap on credit card interest rates of 10 percent, reviving a campaign pledge that immediately drew sharp criticism from banking trade groups and sparked market declines for major card issuers and networks. Trump did not specify whether the proposal would be pursued through legislation or executive action.

Following the announcement, shares of major credit card issuers and networks fell, reflecting investor concern over the potential impact on profitability and lending models. Bank trade associations, including the American Bankers Association and the Consumer Bankers Association, warned that a 10 percent cap would significantly reduce credit availability, particularly for higher-risk borrowers, and could push consumers toward less regulated and more expensive alternatives. 

Industry groups argued that interest rate caps prevent lenders from appropriately pricing risk and would likely lead to account closures, lower credit limits, tighter underwriting standards, and reduced rewards programs. The Electronic Payments Coalition reported that a 10% APR cap would cause 82-88% of open credit card accounts to “effectively lose access to credit” and “nearly every credit card account associated with a credit score below 740 would be closed or severely restricted.” 

Whether the President has the authority to impose such a cap unilaterally remains unclear. Interest rate limits would ordinarily require congressional action, and no legislation is currently positioned to meet the president’s proposed timeline. Nonetheless, the announcement signals a renewed policy focus on consumer credit costs and sets the stage for further debate over the balance between affordability, access to credit, and market-based pricing.