Donald Trump wants to put a temporary cap on credit card interest rates at 10%, according to a Wednesday post on X by the official X account for the Trump campaign.
Trump proposed the idea at a campaign rally in New York, the Wall Street Journal (WSJ) reported Thursday (Sept. 19).
“While working Americans catch up, we’re going to put a temporary cap on credit card interest rates,” he said, according to the report. “We can’t let them make 25 and 30 percent.”
The average interest rate on credit cards is near its highest levels in a decade, at 21.5% in May, the report said, citing data from the Federal Reserve. The average rate hasn’t been below 10% in the time that data has been collected, since 1994.
Even individuals with the highest credit scores reported median interest rates of 23% at large banks and 15% at small banks, the report said, citing data from the Consumer Financial Protection Bureau (CFPB).
The American Bankers Association (ABA) said in the WSJ report that a cap on interest rates would reduce consumers’ access to credit and force them to use payday lenders, loan sharks and other riskier alternatives.
In a position statement on its website that covers interest rate caps in general, the ABA said that while these caps sound appealing, they can limit access to credit and harm the economy.
“Because arbitrary caps do not reduce demand for funds by consumers and businesses, borrowers are forced to seek the services of payday lenders and other less-regulated sources of loans, including the black market,” the statement said.
Earlier proposals by legislators to cap credit card interest rates have not gained traction. Sen. Bernie Sanders (I-Vt.) proposed a 15% cap, while Sen. Josh Hawley (R-Mo.) proposed an 18% cap, per the WSJ report.
When introducing his bill proposing a cap in 2019, Sanders said in a press release that at that time banks could borrow money at less than 2.5% from the Federal Reserve and the median credit card interest rate was 21%.
Hawley introduced his bill in September 2023, saying it would cap credit card interest rates at “common sense levels” at a time when many major credit cards’ interest rates had surpassed 30% for the first time.
“Americans are being crushed under the weight of record credit card debt — and the biggest banks are just getting richer,” Hawley said at the time in a press release.
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