President Donald Trump has set a January 20 deadline for credit card companies to cap interest rates at 10%, leaving the industry scrambling for clarity on enforcement with only days remaining.
At a Glance
- Trump issued a 10% credit card interest rate cap demand one week before the deadline
- White House has not specified consequences for non-compliance
- Americans could save $100 billion annually if implemented
- Major banks oppose the cap but offer to work with administration
- Why it matters: Credit card debt affects millions of Americans paying average rates above 20%
The White House has provided no details about potential consequences for companies that fail to lower rates. White House Press Secretary Karoline Leavitt stated the president has “an expectation” that credit card companies will comply with the 10% cap.
“I don’t have a specific consequence to outline for you but certainly this is an expectation and frankly a demand that the president has made,” Leavitt said Friday.
Research Shows Billions in Potential Savings
Research conducted during Trump’s 2024 presidential campaign found that Americans would save approximately $100 billion annually in interest payments if credit card rates were capped at 10%. The same research indicated that while the credit card industry would face significant impacts, it would remain profitable.
Credit card rewards and other perks might be reduced under such a cap. The administration has promoted this research through official White House social media channels.
Industry Lobbyists Left in Dark
Bank lobbyists have spent the past week attempting to determine the White House’s plans for the industry, according to sources familiar with the matter. Despite legislative efforts, both Republican and Democratic leadership in Congress have shown little enthusiasm for passing interest rate cap legislation.
The Dodd-Frank Act, enacted after the 2008 financial crisis, explicitly prohibits at least one federal bank regulator from setting usury limits on loans, creating potential legal complications for enforcement.
Without formal legislation or an executive order, Trump may rely on political pressure to influence the industry, similar to his approach with pharmaceutical companies and tech manufacturers. His previous demands resulted in drug industry CEOs pledging price cuts and companies like Apple committing to domestic manufacturing expansion.
Wall Street Balances Opposition and Cooperation
Major banks have adopted a dual approach, pushing back against the rate cap while simultaneously offering cooperation. This measured response reflects the industry’s benefits from the Trump administration’s deregulatory agenda, including the One Big Beautiful Bill signed in July that provided significant tax cuts.
JPMorgan’s Chief Financial Officer Jeffrey Barnum indicated Tuesday that the industry would use all available resources to oppose rate caps. JPMorgan holds $239.4 billion in credit card balances and maintains major partnerships with United Airlines and Amazon. The bank recently acquired the Apple Card portfolio from Goldman Sachs.
Citigroup’s chief financial officer Mark Mason stated Wednesday that the company “could not or would not support” a rate cap, arguing it would restrict consumer credit and harm the economy. However, Mason added, “Affordability is a big issue, and we look forward to collaborating with the administration on ways we can address this.”
Trump Expands Focus to Swipe Fees
The president has also endorsed congressional legislation that could reduce bank revenue from merchant fees charged during card transactions. This move represents an additional front in the administration’s pressure on the financial industry.
Fintech Company Takes Preemptive Action
Fintech firm Bilt has launched new credit cards capping interest rates at 10% for new purchases during the first year. While similar to promotional rates offered by other companies, Bilt’s move demonstrates how the industry might accommodate White House demands without fundamental business model changes.
“If (a credit card rate cap) is going to happen, we’d rather be at the forefront,” said Ankur Jain, Bilt’s CEO.
The implementation timeline and enforcement mechanisms for Trump’s 10% rate cap demand remain unclear as the January 20 deadline approaches, with industry stakeholders continuing to seek clarification from the administration.
