President Donald Trump announced on Friday that he is calling for a temporary one-year cap on credit card interest rates at 10%, effective January 20, 2026.
This idea piggybacks off bipartisan legislation that has already been introduced by Independent Senator Bernie Sanders of Vermont and Republican Senator Josh Hawley of Missouri and Democratic Representative Alexandria Ocasio-Cortez of New York and Republican Representative Anna Paulina Luna of Florida.
Americans are facing record-breaking credit card debt. By the third quarter of 2025, total credit card balances reached approximately $1.23 trillion. The average household credit card debt was at $10,563 in 2024. The average credit card interest rate currently hovers around 21% to 22%, though rates can range from 17.69% for borrowers with excellent credit to as high as 35.99% for those with poor credit.
Nearly 46% of U.S. credit cardholders carry a balance from month to month, and delinquency rates remain elevated at nearly 7% of balances entering delinquency within the past year.
Sanders and Hawley introduced the 10 Percent Credit Card Interest Rate Cap Act (S.381) on February 4, 2025. The bill would temporarily cap credit card interest rates at 10% for five years, with provisions expiring on January 1, 2031. Senator Jeff Merkley (D-OR) joined as a co-sponsor on March 11, 2025.
Sanders pointed out that a 28% interest rate on a $5,000 credit card balance costs consumers as much as $11,000 in interest and takes up to 24 years to pay off, while capping rates at 10% would save that consumer over $7,200.
S.381 was read twice and referred to the Senate Committee on Banking, Housing, and Urban Affairs on February 4, 2025, where it remains.
Ocasio-Cortez and Luna introduced H.R. 1944, on March 6, 2025. This bill mirrors the Senate version by proposing a 10% cap on credit card interest rates. H.R. 1944 was referred to the House Committee on Financial Services on March 6, 2025, where it has yet to be placed on the calendar for a vote.
Banks and credit unions have replied to both the introduced legislation and Trump’s proposal.
“We share the President’s goal of helping Americans access more affordable credit, the American Bankers Association wrote in a statement. “At the same time, evidence shows that a 10% interest rate cap would reduce credit availability and be devastating for millions of American families and small business owners who rely on and value their credit cards.”
Trump’s push for a credit card interest rate cap is confusing since his administration previously rolled back consumer protections. In his first weeks in office, the Trump administration sided with banks to block an $8 limit on credit card late fees that had been established under President Biden, , which the Consumer Financial Protection Bureau estimated would save families over $10 billion annually. The administration has also sought to dismantle the Consumer Financial Protection Bureau itself, the federal agency responsible for overseeing consumer finance.
Senator Sanders criticized the president on X, stating: “Trump promised to cap credit card interest rates at 10% and stop Wall Street from getting away with murder. Instead, he deregulated big banks charging up to 30% interest on credit cards.”
