On January 21, 2026, as part of his remarks to the World Economic Forum, President Trump made a public statement calling on Congress to pass a one-year cap of 10% on credit card interest rates. This followed a social media post Trump made on January 16 demanding that credit card companies cap their interest rates beginning on January 20. 

Impact:  

Given that this was not a policy action that the President has the authority to pass or enforce without an act from Congress, no major credit card companies have reportedly yet taken action to cap their rates. There is legislation that was already introduced in 2025 in both the House and Senate that would take steps toward capping rates, but so far Trump has not specifically pushed for that legislation to pass. It is also quite unclear why any credit card regulation should only last one year. That makes sense from a baldly political view – it’s the year before a mid-term election. Any rationale based on alleviating American families’ economic security seems harder to see. 

Putting aside the lack of impact so far from this particular announcement by Trump, it’s worth considering how a cap on interest rates – or any other actions by banks that may price-gouge consumers – would actually play out if Congress were to pass a bill. 

There is definitely lots of room for regulation of credit cards – including the interest rates they charge – in order to protect consumers. But 10% is an utterly arbitrary number. The profits that CC companies make depend both on the interest rates they charge and short-term interest rates more broadly in the market. But, these short-term rates can jump around a lot – so, any given interest rate cap can become much more or much less binding depending on this. Ideally, then, the interest rate cap should not be a flat number, but should be a number pegged off of the reference interest rate.   

Today, short-term interest rates remain on the higher end of what has characterized the past few decades. They are being kept up by continued inflation and large projected Federal budget deficits resulting from Trump administration policies. This means that a 10% cap would be extremely binding on credit card companies today, and threats that they might restrict credit to those with low-credit scores and thereby chase them into the arms of even higher-interest products like payday loans seem quite real.  

Other more effective policies to squeeze out excess profits from credit card companies and force them to lower interest rates could include:  

• Mandating reductions in the “swipe fees” charged by credit card companies. 

• Banning advertising of credit cards. 

• Creating a government exchange that allowed people to compare credit cards across 3-4 very simple metrics, to induce more competition that will force interest rates down. This kind of exchange would ideally be managed by a restored and more robust CFPB, for example.  

• Giving every American a payment account at the Federal Reserve that provided payment services (like debit cards and low revolving debt payments) at minimum costs. 

The real key to ensuring a decent economic life for all is running an economy where people don’t need to borrow so much money so regularly to get buy. At some point, there is no interest rate that will make your life sustainable if you continually have to carry short-term debt because your available resources don’t cover your costs. Serious proposals aimed at boosting affordability for American families involve policies to boost wage growth and offer more-generous public benefits. 

Lastly, to gauge whether the Trump administration is actually serious about cracking down on bad practices and profit-seeking behavior by banks, it’s important also to note how Trump has treated the Consumer Financial Protection Bureau (CFPB). The CFPB is a federal government bank watchdog that has returned more than $20 billion to households directly from banks stemming from robust regulation of fraud. Beginning with the so-called Department of Government Efficiency (DOGE) in early 2025, the Trump administration has effectively destroyed the CFPB in all but name for now. The first Trump administration also significantly weakened the CFPB – in 2015 (under the Obama administration) and 2021-2024 (under the Biden administration), annual payments from banks to households were about $4 billion per year. In 2018-2020 (under the first Trump administration), they averaged well under $1 billion.