What Trump’s Credit Card Rate Cap Would Change for U.S. Consumers

President Donald Trump has proposed a major change to how credit cards work in the United States: a one-year cap on interest rates at 10 percent.

If implemented, the policy would cut typical credit-card rates roughly in half, as the current national average sits around 20 percent. Trump says the plan would protect consumers from what he calls excessive charges and give Americans some financial relief.

Financial markets reacted quickly after the announcement. Shares of major credit-card companies and banks slipped, reflecting investor concern that lower interest rates would reduce profits from consumer lending.

Banking industry groups have also warned that a strict cap could have unintended consequences, including making it harder for some people to qualify for credit.

For cardholders with large balances, a temporary 10 percent cap could mean lower monthly interest and a better chance of paying down debt.

But economists caution that banks may respond by tightening lending standards, especially for borrowers with lower incomes or weaker credit histories. In that case, some consumers could lose access to credit altogether.

Smaller banks, which rely heavily on interest from credit-card lending, could also feel the impact more sharply.

The proposal has also sparked bipartisan attention, as similar ideas have been floated in Congress before. Whether Trump’s plan becomes law remains unclear, but it has already ignited a new debate about the cost of borrowing in America.