Donald Trump Proposes 10% Cap on Credit Card Interest: Americans Could Save $100 Billion

On January 10, 2026, US President Donald Trump proposed a 1-year cap on credit card interest rates at 10%, with intended implementation starting January 20, as per news reports.  

This move, if enacted, could generate savings of over $100 billion for American credit card users, according to a recent study by Vanderbilt University. 

Massive Savings from 10% Credit Card Interest Rate Cap 

As per Vanderbilt University's 2025 report titled “Capping Credit Card Rates,” a 10% cap on credit card interest could result in annual savings of approximately $100 billion for American consumers.  

The analysis focused on existing credit card terms and profit margins across credit score categories, concluding the industry’s interest margins are substantial enough to absorb rate reductions without significant adjustments. 

Impact on Consumers and Banking Practices 

Consumer savings are expected to be widespread, crossing across all FICO score tiers. Net savings for the public after accounting for reduced rewards for lower-score cardholders stand at $73 billion.  

Those with FICO scores above 760 would retain their current reward levels and share in roughly $16 billion of the total savings. However, banks may cut rewards for lower-tier customers by an estimated $27 billion to retain profitability. 

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Political Reactions and Legislation Status 

Although several bipartisan efforts have previously proposed similar interest caps—including proposals from Senators Bernie Sanders and Josh Hawley and Representatives Alexandria Ocasio-Cortez and Anna Paulina Luna—there is no current legislation enforcing such a cap. 

Democratic Senator Elizabeth Warren has dismissed Trump’s announcement as ineffective without congressional backing. 

Industry Response and Economic Considerations 

No major credit card issuers have given statements regarding the proposal. Investor Bill Ackman criticised the concept, suggesting it may lead to reduced credit access and push borrowers into higher-risk lending channels.  

The value chain of the credit card industry, which earns $120 billion in interest and $162 billion in card-processing fees annually, stands to undergo notable shifts should the cap be enforced. 

Conclusion 

Donald Trump’s proposal to cap credit card interest rates at 10% could save Americans as much as $100 billion annually, according to Vanderbilt's 2025 analysis. While the potential for consumer financial relief is significant, its success depends entirely on legislative action and implementation by financial institutions. 

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