Trump Announces 10% Cap on Credit Card Interest Rates: What It Means for Consumers and Markets

President Donald Trump has announced that credit card interest rates will be capped at 10%, with the policy set to take effect on January 20. If implemented as outlined, this would mark one of the most aggressive interventions into credit card interest rates in modern US history.

Credit card interest rates currently sit far higher, often exceeding 20% for many consumers. A hard cap at 10% would immediately lower borrowing costs for millions of households carrying revolving balances.

For consumers, the impact is straightforward. Lower credit card interest rates mean less money lost to interest charges and a clearer path to paying down existing debt.

Households under pressure from inflation and higher living costs would likely feel relief quickly. Monthly repayments would fall, and balances would decline faster even without increased payments.

Banks and card issuers face a very different reality. Credit card interest rates are a major profit driver, and a 10% ceiling could compress margins significantly across the sector.

Lenders may respond by tightening approval standards or reducing credit limits. Access to credit could become more restrictive, particularly for higher-risk borrowers.

From a market perspective, the announcement introduces uncertainty around financial stocks. Investors will be watching closely to see whether the cap applies universally or includes exemptions for certain products.

There are also broader questions around implementation. Capping credit card interest rates at a federal level would likely face legal, regulatory, and political challenges before becoming permanent policy.

Still, the message is clear. Credit card interest rates have become a political issue, and pressure on lenders is now firmly in the spotlight.