The news: President Donald Trump said he will cap credit card interest rates at 10% for one year starting January 20, per a White House post on X.

How the Trump administration intends to enforce this policy remains unclear without congressional approval or explicit regulatory action. 

Trump on Tuesday opened up a new front in the administration’s bellicose posturing against financial institutions, putting his support behind the bipartisan Credit Card Competition Act, which would limit the swipe fees retailers pay for credit card transactions. 

Issuers respond: The American Bankers Association argued that capping rates would reduce credit access for millions of American families and small businesses  and drive consumers to more dangerous lending alternatives like payday loans, which can carry effective APRs of 400%, per CFPB data. 

These changes would hurt US adults who already face a deepening cost-of-living crisis and the pressure of resumed student loan payments.

Implications for lenders: Caps on interest rates would reverberate across the payment landscape. 

1. Boxed out of credit cards, consumers will seek alternative forms of credit—that could be a boon to BNPL players like Klarna and Cash App Afterpay that use proprietary underwriting models that already extend more credit to underserved consumers.
2. Rewards will shrink. Premium cards draw in wealthy spenders for their diverse range of travel, dining, and leisure perks, which are funded by swipe fees and revolvers’ APRs. Without that funding, issuers will likely slash rewards to preserve profits. Weaker rewards may also benefit BNPL players, which have struggled to counter issuers’ perks with lukewarm subscription tiers.
3. Legal battles will be long and vicious. While Trump has placed a January 20 deadline for changes, protracted legal battles will likely delay enforcement.