The U.S. financial sector has issued stark warnings regarding former President Donald Trump’s proposal to impose a 10% cap on credit card interest rates, asserting this measure would trigger severe credit restrictions affecting millions of American households and small businesses. Announced on January 14, 2026, as a response to mounting voter concerns about living costs, the proposed one-year cap scheduled to commence on January 20 has drawn immediate industry backlash.
Financial institutions and industry coalitions have mobilized to counter the proposal, presenting data suggesting catastrophic consequences for credit accessibility. According to the Electronic Payments Coalition, representing major financial entities and payment networks, approximately 82-88% of open credit card accounts held by consumers with credit scores below 740 would face either complete closure or substantial credit limitations under such a cap.
Richard Hunt, Executive Chairman of the Electronic Payments Coalition, characterized the proposal as counterproductive, stating: “While a government-mandated price cap might appear superficially appealing, its implementation would produce precisely the opposite of its intended effect—harming families, constraining economic opportunity, and ultimately weakening our national economy.”
Industry analysts project that the cap would render credit card operations unprofitable for lenders, forcing widespread account closures particularly affecting subprime borrowers. Even consumers with stronger credit profiles would likely encounter increased annual fees, reduced rewards programs, and additional monthly charges as financial institutions seek to offset lost revenue.
Current market data underscores the significance of high interest rates to industry profitability. The Consumer Financial Protection Bureau reported average APRs reaching 25.2% for general purpose cards and 31.3% for private label cards in 2024—the highest levels recorded since 2015. Concurrently, the proportion of cardholders making only minimum payments reached its highest point in nine years, indicating growing financial strain among consumers.
Michael Miller, Morningstar analyst, noted the proposal’s uncertain implementation pathway, suggesting congressional action would be required: “President Trump’s statement primarily functions as a symbolic gesture rather than concrete policy. While we consider actual implementation unlikely, the potential consequences for credit card profitability would be dire if enacted.”
Countervailing research from Vanderbilt University’s Policy Accelerator, published in September 2025, indicates consumers could save approximately $100 billion annually under a 10% cap, though borrowers with credit scores below 760 might experience reduced rewards benefits. Brian Shearer, the center’s competition and regulatory policy director, challenged industry warnings: “Claims regarding massive account closures overlook the substantial profit margins currently enjoyed by credit card issuers. Our analysis indicates significant room for efficiency improvements without compromising access.”