Trump’s Credit Card Rate Cap Proposal Highlights U.S. Debt Struggles

 U.S. consumers face mounting credit card debt as President Trump proposes a 10% interest rate cap

Americans Grapple with Rising Credit Card Debt

Credit card debt has become a growing burden for millions of Americans. With average interest rates climbing to 22% in November 2025, consumers like Selena Cooper, 26, are struggling to keep up. Cooper, a former paralegal in South Carolina, saw her income vanish during a government shutdown, leaving her with $6,000 across three credit cards.

“I missed my first payment in October,” Cooper said. “The rates on my cards have doubled, and it’s just overwhelming. A cap at 10% would help a little, but it won’t erase my debt.”

Trump’s 10% Rate Cap Proposal

President Donald Trump recently proposed capping credit card interest rates at 10% for one year starting January 20, 2026. The plan is aimed at providing relief for struggling Americans, though it has sparked controversy among banks and economists alike.

While some experts see potential benefits, others warn the cap could reduce access to credit for higher-risk borrowers. “Banks might limit how much they lend or increase fees elsewhere,” said Benedict Guttman-Kenney, assistant professor of finance at Rice University.

Banks Push Back Against the Proposal

Major banks argue that a rate cap could undermine credit availability and consumer spending. JP Morgan CFO Jeremy Barnum warned that “people will lose access to credit on a very extensive basis, especially those who need it most.” Citigroup CEO Jane Fraser echoed concerns, citing potential impacts on the broader economy.

Despite these warnings, a study by Vanderbilt University suggested Americans could save roughly $100 billion annually in interest costs under a 10% cap. “This would noticeably impact household budgets,” said researcher Brian Shearer.

Bipartisan Support, But Hurdles Remain

The concept of a credit card rate cap has gained bipartisan support, with figures like Senator Josh Hawley (R) and Senator Bernie Sanders (D) backing a 10% limit. Democratic Senator Elizabeth Warren encouraged Trump to leverage congressional action to make it a reality.

However, political obstacles remain. House Speaker Mike Johnson expressed caution over potential negative consequences, while banks are expected to continue lobbying against the measure.

Real-Life Impact on Americans

Individuals like Morgan, 31, rely on credit cards for essential expenses. Using a card to cover childcare costs, Morgan has accumulated $6,700 in debt. “A 10% cap would be a step in the right direction,” she said. “It’s one of the few proposals prioritizing people over businesses.”

As discussions continue, the proposal underscores the ongoing tension between providing relief to American consumers and maintaining the financial systems that banks rely on for revenue.