Trump’s Credit Card Cap Is a Headline, Not a Policy

Trump Says He Wants to Help Credit Card Holders. His Record Tells a Different Story.

President Trump continues to offer a hodgepodge of policies to address the affordability crisis. Last week, I wrote about Trump’s pathetic policy response to the housing crisis. Today, I want to look at his proposal to lower credit card interest rates.

There is a clear throughline across Trump’s economic agenda. He focuses on narrow, highly visible issues that might provide only limited relief, while advancing other policies that push up costs for working households.

Credit Card Debt

Given the upward pressure on prices since the pandemic, it is not surprising that credit card debt has increased.

Americans owe about $1.23 trillion in credit card debt, up roughly 5.7 percent from the previous year.

About 46 percent of households carry credit card debt.

Over half of households earning $80,000 or less have credit card debt.

The average household debt balance is between $6,500 and $6,700.

Middle-aged households carry the most debt on average, roughly $9,600.

Banks’ Profits

The banking industry did quite well in 2025. U.S. banks reported strong overall profits, including an approximate 13.5 percent increase in sector-wide profits in the third quarter of 2025.

Credit cards are an important part of bank portfolios because they generate higher returns than many other lending products. High interest rates and penalty pricing make credit card debt especially profitable.

Trump’s Proposal

President Trump has proposed a temporary 10 percent cap on credit card interest rates effective January 20. The current average credit card interest rate is about 22 percent.

Almost all credit cards include penalty interest rates that can take effect if a payment is missed. These penalty rates commonly range from about 27 to 30 percent. I was surprised to learn that the penalty interest rate on one of my own credit cards is 39.99 percent.

Like most of his policy proposals, Trump announced this on Truth Social. So far, there are no legal, regulatory, or enforcement details. There has been some vague discussion of a Trump-branded credit card, but nothing concrete.

There is already legislation that does exactly what Trump claims to want. A bill introduced by Senator Bernie Sanders would cap credit card interest rates at 10 percent. That bill has been sitting in the Senate Banking Committee since February and has not received a hearing or a vote. As of today, Trump has not endorsed the bill or put forward his own legislation.

Trump’s Record

Unfortunately, Trump’s other policies have actively weakened protections for credit cardholders.

The Consumer Financial Protection Bureau was created after the 2008 financial crisis to protect consumers from abusive lending practices. Shortly after taking office, the Trump Administration dramatically cut the CFPB’s budget and laid off much of its staff.

The Administration also rolled back several consumer protection measures. For example, the rule that would have capped credit card late fees was vacated. These actions sent a clear signal to the banking industry that aggressive enforcement and oversight were no longer priorities.

The result is a familiar pattern. Trump highlights a real economic problem, offers a headline-grabbing solution, and provides no serious path to implementation. At the same time, his Administration removes the very safeguards designed to protect consumers from abuse.

What You Can Do

Affordability will be a central issue in the 2026 midterm elections. The Administration has signaled that Trump will increasingly emphasize affordability and cost of living in upcoming public appearances to tout his economic record. It is worth understanding the difference between headline promises and good policies that are actually enforced.

If you believe a bank or credit card company is treating you unfairly, you are not powerless. Both state and federal consumer protection offices still exist, and they rely on consumer complaints to identify patterns of abuse.

If you are struggling with credit card debt, be cautious about for-profit debt relief companies. Many charge high fees and make promises they cannot keep. Nonprofit credit counseling organizations can help you understand your options, create a realistic repayment plan, and avoid scams.

Resources

State consumer protection and Attorney General offices
Every state has a consumer protection office, usually within the Attorney General’s office, that accepts complaints about unfair or deceptive business practices, including credit cards and lending. You can find your state office here:
https://www.usa.gov/state-consumer

Consumer Financial Protection Bureau complaint portal
The CFPB accepts complaints about credit cards, banks, and debt collectors and forwards them to companies for response. While the agency has been weakened, its complaint system still exists and creates a public record.
https://www.consumerfinance.gov/complaint/

Nonprofit credit counseling and debt help
The National Foundation for Credit Counseling connects consumers with certified nonprofit counselors who can help with budgeting, debt management plans, and financial education. https://www.nfcc.org

Money Management International also offers nonprofit credit counseling and debt education. https://www.moneymanagement.org

Federal guidance on getting out of debt
The Federal Trade Commission provides plain language guidance on negotiating with creditors, managing debt, and avoiding debt relief scams.
https://consumer.ftc.gov/articles/how-get-out-debt

Sources:

1. U.S. credit card debt totals and trends
   Federal Reserve Bank of New York, Household Debt and Credit Report. Total U.S. credit card balances exceeded $1.2 trillion in 2024 and continued to rise into 2025.

2. Share of households carrying credit card debt
   Federal Reserve Bank of St. Louis, Which U.S. Households Have Credit Card Debt? Approximately 46 percent of households carry credit card balances.

3. Credit card debt by income and age
   Federal Reserve Survey of Consumer Finances and Experian consumer credit data show that middle income and middle aged households are the most likely to carry credit card debt and tend to hold the highest balances.

4. Average credit card balances
   Federal Reserve Bank of New York and consumer finance surveys estimate average revolving credit card balances between $6,500 and $6,700 for households carrying debt.

5. Average credit card interest rates
   Federal Reserve data show average credit card APRs above 21 percent, with many market surveys reporting rates around 22 percent or higher.

6. Penalty interest rates on credit cards
   Credit card agreements commonly include penalty APRs triggered by missed payments, often ranging from the high 20 percent range to nearly 30 percent, with some cards disclosing penalty rates as high as 39.99 percent.

7. Bank profitability and credit card lending
   FDIC Quarterly Banking Profile and Federal Reserve research note that credit card lending generates higher returns than many other consumer lending products and contributes meaningfully to bank profitability.

8. Trump proposal on credit card interest rates
   Public statements by President Trump on Truth Social calling for a temporary 10 percent cap on credit card interest rates. No accompanying legislative proposal or regulatory framework has been released as of this writing.

9. 10 Percent Credit Card Interest Rate Cap Act
   Senate Bill S.381, introduced by Senator Bernie Sanders in February 2025, proposes a statutory 10 percent cap on credit card interest rates. The bill has been referred to the Senate Banking Committee and has not received a hearing or vote.

10. Consumer Financial Protection Bureau
    The CFPB was created under the Dodd Frank Act following the 2008 financial crisis to protect consumers from unfair, deceptive, or abusive financial practices. The Trump Administration reduced the agency’s budget, staffing, and enforcement activity, and supported efforts that resulted in the vacating of a CFPB rule capping credit card late fees.