Trump Asks Credit Card Companies to Cap Rates at 10%

Summary

US President Trump has demanded that credit card companies cap their interest rates at 10% by January 20, 2026, threatening legal action for non-compliance.Sina Finance The move, aimed at addressing voter concerns about the cost of living ahead of midterm elections, targets rates that can be as high as 30%.Zhitong While lacking clear legislative support, the proposal has caused market jitters and drawn strong opposition from the banking industry, which warns of severe credit tightening and negative impacts on consumers’ access to credit.InfoCast+ 2

Impact Analysis

This is classic Trump political theater, not a serious legislative proposal. He’s been hammering the Fed for lower rates for over a year Sina Finance+ 2, and now he’s targeting card issuers to score points with voters on cost-of-living concerns ahead of the midterms Zhitong. The 10% cap itself is a non-starter; it needs Congress, and the banking lobby is already calling it “devastating” InfoCast+ 2.

The interesting part isn’t the proposal, it’s the second-order effects. The market sold off names like Capital One and Citi Sina Finance, but the real story is the inevitable credit tightening. To protect themselves from this political heat and impossible economics, banks will have no choice but to cut off credit for millions of higher-risk borrowers InfoCast. So, ironically, a policy meant to help financially stressed consumers will likely deny them access to credit altogether, potentially pushing them toward predatory lenders Stheadline. I see this less as a direct threat to bank profitability and more as a coming headwind for subprime consumer spending.