• Trump proposes a one-year cap on credit card interest rates at 10% effective January 20, 2026.
• The initiative is aimed at reducing financial strain on American consumers.
• Opposition from credit card companies and banks raises concerns about potential negative impacts.
• Legislation is needed for the cap to be implemented, facing hurdles in Congress.
• Trump's plan could save consumers approximately $100 billion annually.

U.S. President Donald Trump has announced a plan to impose a 10% cap on credit card interest rates for one year starting January 20, 2026, responding to rising affordability concerns among American consumers. He criticized the previous Biden administration for not addressing the issue sooner, stating on Truth Social that high rates have led to the public being "ripped off" by credit card companies, which charge interest between 20% and 30% or more. This announcement coincides with broader efforts from his administration aimed at easing financial pressures on consumers, including significant mortgage bond purchases by the U.S. government, according to Indiatimes and Reuters.

Despite this ambitious plan, details regarding its implementation remain vague. Trump did not specify whether the cap would be enacted through executive order or would require legislative action, which complicates its potential to become law. There has been some bipartisan interest in addressing high interest rates, with prominent Democrats and Republicans previously introducing legislation aimed at capping such rates, but to date, no significant bill has passed. Critics argue that without firm legislative backing, Trump's proposal lacks substance, according to Los Angeles Times and Reuters.

The banking industry has voiced strong opposition to Trump's proposal, warning that it could push consumers towards unregulated, higher-cost alternatives. In a joint statement, the American Bankers Association argued that the cap would not solve the underlying issues and could negatively impact consumer credit availability. This stance comes despite the fact that research indicates a cap at 10% could save American consumers as much as $100 billion in interest annually, highlighting the significant potential benefits for households struggling with high credit costs, according to Los Angeles Times.

Political analysts note that Trump's push for the cap revives a previous campaign promise but continues to face skepticism regarding its feasibility without Congressional support. Both major parties have expressed concerns about high credit card rates, signaling a potential opening for collaboration on consumer protection measures. However, without formal legislative action, the cap remains aspirational at this moment, as indicated by multiple sources, including Los Angeles Times and Reuters.