In a Truth Social post that sent shockwaves through financial markets, President Donald Trump called for a one-year cap on credit card interest rates at 10%, timing the proposed implementation to coincide with the one-year anniversary of his second inauguration on January 20, 2026.

"The American public is being ripped off," Trump declared, taking aim at an industry where the average credit card interest rate currently stands at 23.79%—more than double his proposed ceiling.

What the Proposal Would Mean for Borrowers

If implemented, the 10% rate cap would represent the most significant consumer credit intervention in modern American history. According to the Bank Policy Institute, more than 14 million American households that rarely pay their credit card balances in full could see immediate relief from crushing interest payments.

For a borrower carrying the average credit card balance of approximately $6,500, the difference between a 23.79% APR and a 10% APR would translate to savings of roughly $900 annually in interest charges. For households carrying larger balances, the savings would be proportionally greater.

The Legal Hurdles Ahead

Despite the populist appeal of the proposal, legal experts say Trump cannot implement such a cap through executive action alone. Brian Shearer, director of competition and regulatory policy at the Vanderbilt Policy Accelerator, explained the constitutional constraints.

"He can't do it through executive action legally. But there are bipartisan bills in the House and Senate that he and his allies could push."

— Brian Shearer, Vanderbilt Policy Accelerator

The Consumer Financial Protection Act explicitly forbids federal rate caps, and both the Truth in Lending Act and the Credit Card Accountability Responsibility and Disclosure (CARD) Act would require congressional amendment for such a change to take effect.

Bipartisan Support Emerges

The proposal has found unexpected allies across the political spectrum. In February 2025, Senators Bernie Sanders (I-Vt.) and Josh Hawley (R-Mo.) introduced S. 381—the 10 Percent Credit Card Interest Rate Cap Act—which would amend the Truth in Lending Act to cap credit card interest rates at 10% for five years.

The bipartisan nature of the legislation suggests that while executive action may be off the table, congressional action remains a possibility, particularly given Trump's demonstrated willingness to pressure lawmakers on economic priorities.

Wall Street's Fierce Opposition

Banking industry groups have mounted aggressive opposition to the proposal. The Bank Policy Institute warned that a 10% cap "would reduce credit availability and be devastating for millions of American families and small business owners who rely on and value their credit cards."

Industry analysts argue that lower-income borrowers and those with less-than-perfect credit could find their access to credit severely curtailed, as banks would be unable to price risk appropriately under such constraints. The institute estimates that millions of Americans who occasionally carry balances could face new restrictions or see their credit limits reduced.

Market Impact

The announcement sent bank stocks tumbling, with major lenders losing billions in market value within hours of Trump's social media post. Bank of America and Wells Fargo shares fell approximately 5%, while Citigroup declined more than 4%. Even JPMorgan Chase, which typically weathers policy volatility well, saw its stock decline around 1%.

The selloff occurred despite strong fourth-quarter earnings from major banks, highlighting how policy uncertainty can override even positive fundamental news.

What Happens Next

The proposal remains in its early stages, with no formal legislation yet introduced in the current congressional session. However, Trump's track record of using social media announcements to build momentum for legislative priorities suggests this issue will remain in the spotlight.

For consumers, the immediate takeaway is that no changes are imminent. Those carrying credit card debt should continue pursuing traditional debt reduction strategies while monitoring congressional developments. The average American household carries approximately $10,000 in credit card debt, making this one of the most personally consequential policy debates of 2026.

Whether the proposal advances or stalls, it has already reshaped the conversation around consumer credit protection—and put the banking industry on notice that its pricing practices face unprecedented political scrutiny.