Former President Donald Trump has unveiled a proposal to cap credit card interest rates at 10% for one year, a move aimed at reducing consumer debt burdens. Financial institutions have reacted with opposition, warning of potential disruptions to lending practices and profitability.
- Trump proposes a 10% annual cap on credit card interest rates for one year.
- Current average credit card APRs are around 23.5%, with some exceeding 30%.
- Major banks including JPMorgan Chase, Bank of America, and Capital One oppose the measure.
- Analysts project up to $18 billion in lost net interest income for large card issuers.
- S&P 500 financial sector declined 1.3% following the announcement.
- 80 million U.S. households carry credit card debt with average balances above $7,800.
Former President Donald Trump has introduced a legislative proposal to impose a temporary 10% annual interest rate cap on credit card borrowing, effective for one year. The measure is designed to alleviate financial strain on consumers carrying high-interest balances, particularly those in lower- and middle-income brackets who often face annual percentage rates (APRs) exceeding 25%. The proposal, introduced during a campaign event in New Jersey on January 10, 2026, calls for a uniform maximum rate of 10% across all credit card products issued by major financial institutions. This would represent a significant reduction from current average APRs, which hover around 23.5% according to Federal Reserve data from late 2025, with some premium cards exceeding 30%. Banks and credit card issuers, including JPMorgan Chase, Bank of America, and Capital One, have voiced strong opposition. Industry analysts estimate that the cap could reduce annual net interest income for large card issuers by up to $18 billion, with some firms projecting a 12% decline in credit card segment profitability. The American Bankers Association has emphasized that such a cap could lead to tighter credit availability, reduced reward programs, and higher fees on other financial products. Market reaction has been mixed. The S&P 500 financial sector index dropped 1.3% the day after the announcement, while credit card-related stocks such as Discover Financial Services (DFS) saw a 2.8% decline. Consumer advocacy groups, however, welcomed the proposal, citing that nearly 80 million U.S. households carry credit card debt, with average balances exceeding $7,800. The proposal now faces a challenging path in Congress, where it must overcome resistance from banking industry lobbyists and concerns over federal overreach in financial regulation.