NEW YORK (AP) — Reviving a campaign pledge, former President Donald Trump is advocating for a one-year, 10% cap on credit card interest rates, a proposal that he claims could save American consumers tens of billions of dollars. However, this move has already met with robust opposition from the banking industry which has historically supported him.
Trump, in a post on social media, did not specify whether the cap would be enacted by executive orders or through legislation but did mention that a Republican senator is prepared to support a bill, aiming to have the cap in place by January 20, one year after he took office.
The banking sector, which has contributed significantly to Trump's political campaigns, has voiced strong objections to the proposal. Trump stated, We will no longer let the American Public be ripped off by Credit Card Companies that are charging Interest Rates of 20 to 30%. Researchers estimate that capping these rates at 10% would save Americans about $100 billion annually. However, it may lead to decreased benefits such as credit card rewards.
Currently, the average American pays an interest rate of between 19.65% and 21.5%, which remains near historic highs since tracking began in the mid-1990s. As the Federal Reserve works to decrease these rates, the credit card industry remains concerned about the implications of Trump's promise.
Leading industry groups, including the American Bankers Association, have criticized the proposal, arguing that such a cap could drive consumers to less regulated alternatives with higher costs. Despite the resistance, Trump's message resonates with citizens frustrated by high credit card interest rates. With bipartisan support for similar measures brewing in Congress, including plans from Senators Bernie Sanders and Josh Hawley, the political landscape surrounding credit card reform is rapidly evolving.
