Trump to Cap Credit Card Interest Rates at 10%

President Donald Trump has called for a one-year cap on credit card interest rates at 10%, effective January 20, 2026—the one-year anniversary of his second inauguration.

He announced this on Truth Social on January 9/10, 2026 (depending on time zones), stating: “Please be informed that we will no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration. AFFORDABILITY! Effective January 20, 2026, I, as President of the United States, am calling for a one year cap on Credit Card Interest Rates of 10%.”

This revives a pledge from his 2024 campaign, amid U.S. credit card debt exceeding $1.1 trillion and average interest rates hovering around 20-21% per Federal Reserve data.

Trump hasn’t specified how the cap would be enforced—whether via executive action, pressuring companies voluntarily, or legislation. Experts widely agree the president cannot unilaterally impose such a cap on private lenders without congressional approval, as usury/interest rate regulations typically require laws.

Similar bipartisan bills from Sens. Bernie Sanders and Josh Hawley for a longer-term 10% cap have stalled in Congress. The announcement caused immediate drops in financial stocks on January 12/13, 2026. Shares in Capital One, Synchrony, American Express, Visa, Mastercard, and others fell sharply— some 4-8%, reflecting investor concerns over lost interest revenue.

American Bankers Association, Electronic Payments Coalition warned it could reduce credit access, leading to account closures or limits—especially for lower-credit-score borrowers—and push people toward riskier alternatives like payday loans. Bill Ackman called it a “mistake” that might cancel millions of cards, though he supports the broader goal of lower rates.

Consumer advocates and some analyses suggest a 10% cap could save Americans tens to hundreds of billions in interest over time, easing burdens for those carrying balances about 60% of cardholders. It aligns with cross-aisle concerns about affordability, with support from figures like Sanders, AOC, and some Republicans.

This fits Trump’s focus on “affordability” issues, though his administration previously rolled back some Biden-era consumer protections on late fees. Critics note the irony given past deregulatory moves. As of now (mid-January 2026), this remains a proposal/call rather than enacted policy—no legislation has passed, and enforcement details are unclear.

It has sparked debate on balancing consumer relief with credit market risks. If you’re affected by high credit card rates, paying down balances aggressively or shopping for lower-APR options (balance transfers, etc.) remains practical advice in the meantime.

Payday loans are short-term, small-dollar loans typically $500 or less designed to be repaid by your next paycheck, often in 2–4 weeks. They are marketed as quick fixes for emergencies but come with significant risks that can worsen financial hardship rather than resolve it.

Payday loans often carry annual percentage rates (APRs) averaging around 391%, with many ranging from 300% to over 600% depending on the state. Fees are typically $15–$30 per $100 borrowed (e.g., a $15 fee on $100 for 2 weeks equates to ~390% APR). This dwarfs typical credit card rates (12–30%) or personal loans often under 36%.

In unregulated or loosely regulated states, rates can hit 662% or higher. Borrowers frequently can’t repay the full amount on due date, leading to “rollovers” — paying just the fee to extend the loan, adding new fees without reducing principal. Studies show many borrowers take out 10+ loans per year, with lenders earning most revenue from repeat customers stuck in this loop.

It can take months, average ~5 months for a $300 loan and cost hundreds extra in fees, turning a small advance into massive debt.
Lenders often require access to your bank account for automatic withdrawal. Failed attempts trigger multiple nonsufficient funds (NSF) or overdraft fees often $35+ each from your bank, piling on costs even if the lender doesn’t get paid.

Aggressive Debt Collection Practices

Defaulting leads to relentless calls, threats sometimes misleading about legal action, and pressure tactics. This can cause severe stress and, in extreme cases, lead to wage garnishment or lawsuits. While payday loans usually don’t report to major credit bureaus if repaid on time, defaults, collections, or charge-offs can appear and hurt your score significantly. Repeated use signals financial instability.

Unlike traditional loans, payday loans rarely help build credit history positively, offering no benefit for future borrowing. They disproportionately affect low-income individuals, those living paycheck-to-paycheck, and underserved communities, often exacerbating poverty rather than providing relief.

The Consumer Financial Protection Bureau (CFPB) and organizations like the Center for Responsible Lending highlight these issues, noting that payday lending business models rely on borrowers’ inability to repay quickly. Some states ban or cap rates at 36% APR inclusive of fees, making them unavailable or far less predatory there, but in others, they remain widely accessible.

If facing a cash shortfall, consider these lower-risk options first: Ask for extensions on bills (rent, utilities, etc.) or negotiate payment plans.
Use credit union payday alternative loans (PALs) — often capped at 28% APR, $200–$1,000, 1–6 month terms. Borrow from friends/family or use a 0% intro APR balance transfer card, if you have good credit.

Explore local nonprofits, community assistance programs, or earned wage access apps with caution, as some mimic payday risks. Build an emergency fund over time to avoid high-cost borrowing.

Payday loans should be a last resort — the short-term convenience rarely outweighs the long-term damage. If you’re already in a cycle, contact a nonprofit credit counselor or the CFPB for help.