Trump just promised to cap credit card rates at 10%, but there’s one major problem with his plan

President Trump said that he wants to limit credit card interest rates to 10 percent for one year. However, he didn’t explain how he plans to make this happen. Such a policy would need approval from Congress or action from regulators.

Trump first talked about this idea during his campaign. According to The New York Times, he said he would put a temporary cap on credit card interest rates at 10 percent.But after taking office, Trump didn’t follow through on this promise. 

His team stopped a rule from the Biden administration that would have limited credit card late fees to $8. His administration also tried to shut down the Consumer Financial Protection Bureau, the country’s main watchdog for consumer finance, without getting approval from Congress.

Trump’s administration has already weakened consumer protections

Russell Vought, who runs the White House budget office, has been leading the Consumer Financial Protection Bureau since early last year. He stopped bank inspections and ended many lawsuits against financial companies accused of breaking consumer protection laws.

He also tried to fire more than 90 percent of the agency’s workers and recently said he hopes the bureau will be gone within the next two or three months. Federal court cases have stopped him from doing this so far.

On Friday, Trump wrote on social media that Americans won’t be “ripped off” anymore by credit card companies charging 20 to 30 percent interest or even more. He added the word “AFFORDABILITY!” to his post. The president has been making bold statements on various topics lately, including his plans to annex Greenland.

Polls show people are less happy with Trump’s economic policies as midterm elections get closer. Trump has changed his message about affordability. Last month, he called it a “fake narrative” and “con job” created by Democrats. He said at a cabinet meeting, “It doesn’t mean anything to anybody”.

Right now, the average credit card interest rate is just under 20 percent, according to Bankrate.com. If Trump wants Congress to pass a law lowering credit card fees, he has support from Senators Bernie Sanders and Josh Hawley. The two senators introduced a bill last year to cap fees at 10 percent for several years, but it didn’t move forward without help from the administration.

Hours before Trump’s social media post, Sanders criticized him online. Sanders wrote that Trump promised to cap credit card rates at 10 percent and stop Wall Street from taking advantage of people. Instead, Trump removed regulations on big banks that charge up to 30 percent interest on credit cards.

While Trump focuses on domestic economic promises, his administration has also been taking aggressive action overseas, including a deadly military strike against ISIS. Credit card companies make $130 billion each year from interest and fees, according to a 2024 estimate from the consumer bureau.

Industry groups strongly oppose any limits on interest rates. Last year, the American Bankers Association and 52 state bankers associations wrote a letter against a 10 percent interest cap, saying that government price controls raise costs instead of lowering them.