January 10, 2026 — In a bold economic policy announcement delivered via a fiery Truth Social post and subsequent press briefing at the White House, President Donald Trump has proposed a temporary one-year cap on credit card interest rates at 10%, aiming to provide immediate relief to millions of Americans grappling with record-high consumer debt.
“This is a WIN for the American people! Credit card companies have been ripping you off with sky-high rates — 25%, 30%, even more! We’re capping it at 10% for one year to give families breathing room and crush the debt trap set by the radical left’s failed policies,” Trump declared in his post, which quickly amassed over 500,000 likes and shares.
The proposal comes as U.S. household credit card debt hit a staggering $1.14 trillion in Q4 2025, according to recent Federal Reserve data, with average APRs hovering around 24.59% — the highest in decades. Trump blamed “Biden-Harris inflation” and “big bank greed” for the surge, vowing to use executive authority to implement the cap if Congress drags its feet.
Details of the Proposed Cap
- Duration: One year, starting potentially as early as March 1, 2026, pending regulatory approval.
- Scope: Applies to all new and existing revolving credit card balances for consumer cards issued by major banks and lenders.
- Enforcement: The Consumer Financial Protection Bureau (CFPB), under new Trump-appointed Director Vivek Ramaswamy, would oversee compliance, with steep fines for violations.
- Exemptions: Business cards, secured cards, and certain promotional rates might be excluded, but details are still being ironed out.
White House economic advisor Larry Kudlow elaborated during the briefing: “This isn’t permanent socialism — it’s a temporary reset to jumpstart the economy. Lower rates mean more spending, more growth, and less reliance on government handouts.”
Market and Industry Reaction
Wall Street reacted swiftly, with shares of major credit card issuers like Visa, Mastercard, American Express, and banks such as JPMorgan Chase dipping 3-7% in after-hours trading on January 9. Analysts warn that the cap could squeeze profit margins, potentially leading to tighter lending standards or higher fees elsewhere.
Consumer advocacy groups, however, hailed the move. Elizabeth Warren (D-MA), a longtime critic of high-interest lending, surprisingly offered muted praise: “It’s a step in the right direction, but why only one year? We need permanent protections.”
On the flip side, banking lobbyists decried it as “government overreach,” arguing it could limit credit access for riskier borrowers and stifle innovation in fintech.
Potential Impact on Consumers
If enacted, the cap could save the average cardholder carrying a $6,300 balance around $900 in interest over the year, per calculations from the Center for Responsible Lending. This relief is particularly timely as inflation cools but everyday costs like groceries and utilities remain elevated.
Here’s a quick breakdown of potential savings based on current averages:
| Balance | Current Avg. APR (24.59%) | Capped APR (10%) | Annual Interest Savings |
|---|---|---|---|
| $5,000 | $1,230 | $500 | $730 |
| $10,000 | $2,459 | $1,000 | $1,459 |
| $20,000 | $4,918 | $2,000 | $2,918 |
Assumptions: Simple interest, no payments made. Actual savings vary with compounding and behavior.
Broader Economic Context
This announcement aligns with Trump’s “America First” economic agenda, following recent moves like the $200 billion mortgage bond purchase directive that slashed home loan rates below 6%. With the 2026 midterms looming, it’s seen as a populist play to woo working-class voters hit hard by post-pandemic recovery pains.
Critics, including some Republicans, question the legality of an executive cap without congressional buy-in, potentially setting up court battles. The administration counters that it’s within the president’s purview under existing consumer protection laws.
As details emerge, expect heated debates in Congress. For now, consumers eyeing debt consolidation or big purchases might hold off — relief could be on the horizon.
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