Can Trump lower your credit card interest? Experts weigh in

It didn’t take long for the fur to fly over President Donald Trump’s proposal for a yearlong, 10% credit card interest rate cap, announced on January 9. His post, which noted a current card environment where rates stand between 20% and 30%, called for the cap to kick in on January 20, 2026.

For the short term, industry experts say the proposal, if it gets a green light, would be a net positive for consumers.

However, some within the industry point to potential downsides. “A blanket 10% cap on credit card interest would reduce access to credit for millions of higher-risk consumers and push pricing risk elsewhere in the system,” said David Johnson, CEO and Founder of Vervent, a credit card and loan servicing company in Boulder, Co. “History shows hard caps don’t eliminate demand; they reshape it, often toward less transparent, less regulated alternatives.”

Credit card consumers can expect some immediate dividends and some restrictions if the Trump credit card cap sees the light of day.

According to a recent Vanderbilt University study, A 10% cap would save Americans $100 billion.

“Steep credit card interest rates are hitting Americans already facing higher prices across the economy,” said Brian Shearer, director of competition and regulatory policy at Vanderbilt Policy Accelerator, which produced the study. “Proposals to cap credit interest rates enjoy support on both sides of the aisle, and contrary to industry claims, could return tens of billions of dollars to Americans without significantly impeding access to credit cards or popular rewards programs.”

The U.S. credit card sector is so financially sound “that it could rein in interest rates, save billions for Americans and small businesses, and still make profits,” Shearer added.

The same study showed that credit card companies could ride out the one-year rate cut by taking away some consumers’ favorite plastic perks.

A 10% cap on credit card rewards would trigger a $27 billion reduction in rewards for customers with FICO scores of 760 or lower.

“However, as the analysis points out, credit card borrowers at these levels would save more than triple in interest than the reduction in rewards, and borrowers with higher credit scores would keep their rewards,” the Vanderbilt study stated.

Credit card companies’ financial machinations would lead to losses, likely affecting U.S. credit card consumers with weaker credit scores.

“Credit card revenue comes in two forms: the cost of providing financing, known as interest revenue, and everything else, known as non-interest revenue,” said Brian Riley, director of credit payments at Javelin Strategy & Research.

Riley said credit card issuers must cover both and also cover their credit losses. “In 2024, a relatively good year for cards, the loan loss provision was 3.62% of quarterly assets,” he said. “If interest rates are capped at 10%, lenders will lose money on their businesses. With a revenue loss, lenders will have no reason to lend, especially not to those with FICO Scores below the prime cutoff.”

Few credit card industry experts know exactly what might happen with the Trump 10% cap proposal, but some sentiment is shaping into form.

“If there’s one thing we have learned about our President it is to take him at his word,” said Bobbi Rebell, personal finance expert at CardRates.com. “The White House is positioning this as a way to offer consumer relief at a time when they have already been pushing the Fed to lower interest rates.”

Rebell said the White House is “hyper aware” of the pressure to make life more affordable for Americans. “This is a smart way to make a relatable proposal that will resonate with consumers who are struggling,” she said. “In other words, they mean it. That doesn’t mean it will happen, however. The industry won’t like it, and actually getting it done could get messy.”

Riley said to watch out for unexpected ramifications with a one-year card rate cap.

“There are many moving parts,” he noted. “If you cut interest rates, you make lending unattractive because it would be unprofitable. Credit cards will be harder to get, or will not carry the generous credit lines, which will affect spending.”

Additionally, merchants will be impacted, and downstream, employment will face challenges. “A move like this rate reduction needs to consider the broader impacts on the economy,” Riley added.