Trump urges credit card companies to slash interest rates to 10% for one year

President Trump is calling for a 10% cap on credit card interest rates for one year, an idea that has received strong support from lawmakers in both parties but has been rejected by card issuers.

“Please be advised that we will no longer allow the American public to be ‘ripped off’ by credit card companies charging interest rates of 20-30% and even higher, which have festered unhindered during the sleepy Joe Biden administration,” the president wrote on Truth Social Friday evening.

Mr. Trump said the interest rate cap is expected to take effect on January 20, 2026, the one-year anniversary of his second inauguration.

Credit card interest rates currently average more than 20%, according to Federal Reserve statistics, so a 10% cap would represent a significant reduction in borrowing costs.

It’s unclear whether the president will attempt to enforce the proposed 10% cap through some sort of executive action, or whether his goal is to pressure credit card issuers to voluntarily reduce their rates. CBS News has reached out to the White House and some of America’s biggest credit card issues for comment.

The idea of ​​capping credit card interest rates has drawn bipartisan support. Last year, Republican Sen. Josh Hawley of Missouri and independent Sen. Bernie Sanders of Vermont, who are joining forces with Democrats, teamed up to introduce legislation that would impose a 10 percent cap. A similar measure was also introduced in the House by Democratic Rep. Alexandria Ocasio-Cortez of New York and Republican Rep. Anna Paulina Luna of Florida.

Other recently proposed bills would impose less strict caps on fees and interest rates.

Mr. Trump also called for temporarily capping interest rates at 10% during the election campaign. Hours before President Truth Social’s release on Friday evening, Sanders criticized Mr. Trump on X for failing to keep his promise to limit interest rates.

Supporters of the idea say it would help large numbers of Americans who are drowning in mountains of credit card debt, and argue that credit card issuers can afford to lower their rates.

Americans owed a total of $1.23 trillion in credit card balances in the third quarter of last year, according to the Federal Reserve Bank of New York. A 2024 study by NerdWallet found that the average American household in credit card debt owes $10,563.

“We cannot continue to allow big banks to make huge profits by fleecing the American people,” Sanders said in a joint press release with Hawley last year.

Luna said: “For too long, credit card companies have gouged working-class Americans with absurd interest rates, trapping them in an almost insurmountable amount of debt. »

But opponents of a cap, including banks and other credit card issuers, warn that interest rate limits could force lenders to stop issuing credit cards to many riskier borrowers.

Scott Simpson, CEO of the trade group America’s Credit Unions, told CBS News in a statement Friday evening: “While we appreciate the president’s desire to increase affordability, the plain truth is that capping rates at 10% does not make credit more affordable, it makes it inaccessible for millions of working Americans because financial institutions will not be able to offer credit cards to most consumers at a rate of 10%.”

The Electronic Payments Coalition – which represents credit card issuers and payment networks – said it supported Mr Trump’s efforts on affordability, but “a one-time 10% cap risks making the situation worse by reducing access to credit and limiting choice”.

In an open letter to lawmakers last year, the American Bankers Association said it found in a 2020 analysis that 95% of subprime borrowers — or 65 million accounts — could lose access to credit cards if interest rates were capped at 15%. The group argued that if credit card issuers ended up having to cut off access to “all but the most low-risk customers,” many people would be forced to turn to “less regulated alternatives” like pawn shops and payday lenders.

Billionaire investor Bill Ackman, who supported Mr Trump during his 2024 campaign, called the idea a “mistake”. He wrote on

The move to cap credit card interest rates is Mr. Trump’s latest proposal to lower borrowing costs as he grapples with widespread concerns about affordability.

Earlier this week, Mr. Trump ordered the federal government to purchase $200 million in cash mortgage bonds from Fannie Mae and Freddie Mac, in an effort to lower mortgage rates.

The president also urged the Federal Reserve to more aggressively cut its benchmark interest rate, which influences borrowing costs in everything from mortgage and auto loans to commercial loans — even though rate cuts by the Fed could run the risk of causing a surge in inflation.

Mr. Trump is expected to name a new Federal Reserve chairman in the coming weeks and told reporters last month that he was “looking for someone who is honest with interest rates.”

Emma Nicholson and Ryan Sprouse contributed to this report.