NEW YORK — President Donald Trump a week ago told the credit card industry it had until Jan. 20 to comply with his demand for a 10% cap on interest rates. With just days to go, consumer groups, politicians, and bankers alike remain unclear on what the White House has planned and whether Trump even remains serious about the idea.
White House Provides No Details
So far, the White House has not provided any detail about what will happen to credit card companies that don't lower card rates. White House Press Secretary Karoline Leavitt said the president has "an expectation" that credit card companies will accede to his demand that they cap interest rates on credit cards at 10%.
"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," she said Friday.
Potential Impact on American Consumers
A researcher who studied Trump's proposal when Trump first floated it during the 2024 presidential campaign found that Americans would save roughly $100 billion in interest a year if credit card rates were capped at 10%. The same researchers found that while the credit card industry would take a major hit, it would still be profitable, although credit card rewards and other perks might be scaled back.
Current credit card interest rates average around 20-24% for most consumers, with some reaching as high as 30% or more for those with poor credit. A 10% cap would represent a dramatic reduction that could fundamentally reshape the consumer credit market.
Banking Industry Response
Major credit card issuers including Chase, Bank of America, Citibank, and Capital One have remained largely silent on the president's demand. Industry representatives have privately expressed confusion about how such a cap would be implemented and whether the president has the legal authority to mandate such changes without congressional action.
Banking industry experts suggest that implementing a 10% rate cap would require either new legislation from Congress or regulatory changes through agencies like the Consumer Financial Protection Bureau (CFPB). The lack of clarity on implementation mechanisms has left banks uncertain about how to respond to the president's directive.
What Happens Next?
With the January 20 deadline approaching, several scenarios are possible. The administration could announce specific enforcement mechanisms or regulatory proposals. Alternatively, the deadline could pass without concrete action, similar to other presidential declarations that lacked follow-through.
Consumer advocacy groups have welcomed the president's attention to high credit card rates but express skepticism about whether meaningful change will occur without legislative action. Meanwhile, financial markets are watching closely, as major changes to credit card practices could significantly impact bank profitability and consumer credit availability.
Key Takeaways:
- • Trump demanded credit card rate cap at 10% by January 20
- • White House has provided no details on enforcement or consequences
- • Americans could save $100 billion annually under such a cap
- • Banks remain uncertain and have not announced compliance plans
- • Legal authority to mandate such changes remains unclear