(JEWISH VOICE NEWS) President Donald Trump is proposing a temporary ceiling on credit card interest rates, calling for a one-year cap of 10% — a move that has won rare bipartisan applause on Capitol Hill while triggering fierce resistance from banks and card issuers, as CBS News reported.

In a late Friday post on Truth Social, Trump said his administration would no longer tolerate what he described as excessive interest charges imposed on consumers. He accused credit card companies of taking advantage of Americans by levying rates that often exceed 20%, arguing that the problem worsened under the Biden administration, CBS News reported.

Trump said the proposed cap would take effect on Jan. 20, 2026 — marking the first anniversary of his second inauguration — and would remain in place for one year. Federal Reserve data shows that average credit card interest rates currently sit above 20%, meaning a 10% ceiling would amount to a dramatic reduction in borrowing costs for millions of cardholders, according to CBS News.

It remains uncertain how the White House would implement such a cap. The president has not clarified whether he would attempt to impose it through executive action or instead use the proposal to pressure credit card companies into voluntarily lowering their rates. CBS News reported that the network has contacted both the White House and major card issuers seeking comment.

Bipartisan backing amid record consumer debt

The idea of limiting credit card interest rates has drawn support from lawmakers across the political spectrum. As CBS News reported, Sen. Josh Hawley, a Republican from Missouri, and Sen. Bernie Sanders, an independent from Vermont who caucuses with Democrats, introduced legislation last year that would impose a 10% cap nationwide. In the House, a similar proposal was backed by Democratic Rep. Alexandria Ocasio-Cortez of New York and Republican Rep. Anna Paulina Luna of Florida.

Trump himself promoted the idea during the campaign, and his latest comments appear to revive that pledge. Just hours before Trump’s Truth Social post, Sanders publicly criticized the president for not acting sooner on the issue, according to CBS News.

Supporters argue the policy could provide relief to Americans drowning in credit card debt. U.S. consumers owed a record $1.23 trillion in credit card balances during the third quarter of last year, according to the Federal Reserve Bank of New York, CBS News reported. A 2024 NerdWallet study found the average household carrying credit card debt owed more than $10,500, while the Consumer Financial Protection Bureau has said interest rates have climbed far beyond what is necessary to cover lending costs.

Sanders previously accused major banks of reaping massive profits at the expense of working families, while Luna said high interest rates have trapped Americans in near-inescapable debt cycles, CBS News reported.

Industry warns of unintended consequences

Banks and credit card issuers, however, are sounding alarms. Trade groups representing the financial industry argue that a strict interest rate cap could sharply reduce access to credit, particularly for borrowers with weaker credit profiles.

In a statement cited by CBS News, organizations including the American Bankers Association and the Bank Policy Institute warned that a 10% cap could lead lenders to pull back on issuing cards altogether, hurting families and small businesses that rely on revolving credit.

The Bank Policy Institute has estimated that more than 14 million households that typically carry balances could lose access to credit under such a cap, with millions more facing tighter restrictions, CBS News reported. The American Bankers Association has also cautioned that limiting rates could push consumers toward less regulated and more expensive alternatives such as payday lenders and pawn shops.

Even some Trump allies have expressed concern. Billionaire investor Bill Ackman, who supported Trump’s 2024 campaign, called the proposal a mistake, arguing that lenders would cancel cards en masse if they cannot charge rates high enough to offset losses, CBS News reported.

Credit union leaders echoed similar warnings. Scott Simpson, CEO of America’s Credit Unions, told CBS News that while affordability is a worthy goal, a 10% cap could make credit “unattainable” for many working Americans.

Part of a broader affordability push

The interest rate proposal fits into Trump’s broader effort to address rising costs. Earlier this week, the president directed the federal government to purchase $200 million in mortgage-backed securities using funds from Fannie Mae and Freddie Mac, aiming to push mortgage rates lower, CBS News reported.

Trump has also repeatedly urged the Federal Reserve to cut its benchmark interest rate more aggressively, though economists warn that sharp rate cuts could reignite inflation. With the current Fed chair’s term nearing its end, Trump has signaled he intends to nominate a replacement soon, saying he wants someone who will be “honest with interest rates,” according to CBS News.

Whether Trump’s proposed credit card rate cap becomes policy remains unclear, but it has already reignited a national debate over consumer debt, bank profits, and the true cost of credit.