Trump Urges Congress to Cap Credit Card Rates at 10%

US President Donald Trump has announced his intention to ask Congress to cap credit card interest rates at 10% for one year. This proposal aims to benefit millions of Americans struggling with high-interest debt. Trump made this statement during a speech at the World Economic Forum in Davos, Switzerland.

Credit Card Rates and Economic Impact

The initiative comes amid growing concerns about the burden of credit card debt on American families. Trump emphasized that capping the rates would help individuals save for essential purchases, such as homes. However, the proposal has sparked significant pushback from major banks and credit card issuers.

Financial Industry Reaction

• JPMorgan Chase CEO Jamie Dimon labeled the rate cap as an “economic disaster” that could result in fewer credit options for consumers.
• Citigroup CEO Jane Fraser expressed skepticism regarding the likelihood of bipartisan support for such a cap in Congress.
• Senate Majority Leader John Thune noted that the proposal could leave many without access to credit, particularly those with lower credit scores.

The financial industry fears that imposing a 10% cap may lead up to 88% of open credit card accounts to potentially lose their access to credit, according to a study from the Electronic Payments Coalition, a lobbying group.

Challenges in Congress

The path to implementing this proposal in Congress remains uncertain. Lawmakers will need to navigate various political interests and opinions surrounding credit card regulations. Trump’s call for legislative action contrasts with the idea that such changes could be implemented through an executive order.

Consumer advocates argue that high interest rates significantly impact Americans, particularly in a time of rising costs. Mike Pierce, executive director of Protect Borrowers, stated that if Trump is serious about aiding families, he needs to rally his Republican allies to prioritize this issue in Congress.

Future of Credit Card Legislation

The discussion surrounding the proposed cap is part of a broader conversation about credit access and consumer protection. There is ongoing debate about legislative efforts, such as the Credit Card Competition Act, which aims to reduce costs for consumers by allowing merchants to bypass dominant payment networks.

While Trump has urged Congress to support this measure, its future remains uncertain as similar efforts have failed to gain traction in recent discussions. As the debate unfolds, the impact of credit card interest rates on American consumers continues to be a pivotal issue.