How Trump's credit card pitch could save Americans billions
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There's evidence that capping credit-card interest rates at 10% would save Americans billions of dollars, although banks warn of consumers losing access to credit.
Why it matters: President Trump says banks should cap card rates at 10% for a year — picking up the mantle for an idea popular with progressives and consumer advocates.
- The cap idea runs counter to much of what the administration has done on banking over the past year — including scrapping a plan to limit credit card late fees.
- Still, it comes as Trump is facing accusations that he's not doing enough to address the affordability crisis.
"When it comes to credit cards, the administration has sided with the industry on almost every major issue," Rohit Chopra, who ran the Consumer Financial Protection Bureau under President Biden, tells Axios.
Catch up quick: Trump promised an interest-rate cap during his 2024 campaign. After Sen. Bernie Sanders (I-Vt.) noted that on X last Friday, Trump took to Truth Social to say he'd do it, effective Jan. 20.
- Such a change would require legislation that's unlikely to pass.
- Still, banking lobbyists and investors freaked out.
- Last year, Sanders and Sen. Josh Hawley (R-Mo.) proposed a bill to cap rates —that's gone nowhere on the Hill.
The latest: Sen. Elizabeth Warren (D-Mass.) said she told Trump on a call on Monday that a bill could pass if he'd back it.
Zoom out: A 10% cap would save Americans $100 billion, per an analysis from Vanderbilt University's Policy Accelerator released last fall. But rewards and lending would likely be cut.
- If the rate was capped at 15% — consumers would save $48 billion, and rewards and lending could hold steady, per the analysis conducted by Brian Shearer, a former CFPB official.
- The analysis used pre-pandemic data on what banks earn from credit cards — looking at the spread between the federal funds rate and credit-card rates — and then modeled what banks would earn if interest rates were capped.
Zoom in: About half of credit-card revenue doesn't come from interest, but from interchange fees, Shearer tells Axios.
- Rates and profit margins are much higher on credit cards than on any other bank loan.
Where it stands: Credit-card interest rates have soared to record levels. In the last three months of 2025, rates hit 21%, on average, per data from the Federal Reserve. (See chart above.)
- That's up from around 15% before the pandemic.
- The share of cardholders making only the minimum payment is at its highest since 2015, per data released quietly by the Consumer Financial Protection Bureau in December.
- Card users were assessed $160 billion in interest in 2024 — up from $105 billion in 2022.
The other side: With the cap, issuers would pull back on access to credit and rewards programs, says Ted Rossman, a senior industry analyst at Bankrate.
- "If enacted, this cap would only drive consumers toward less regulated, more costly alternatives," the Consumer Bankers Association said Friday.
- Economists have doubts, too. "A 10% cap would worry a lot of people," says Neale Mahoney, a Stanford University economist who has warned about the unintended consequences of price controls.
Reality check: Industry analysts and consumer advocates say there's little chance the idea becomes law.
- The proposal is also at odds with the administration's record. The CFPB, which was gathering data on the industry and taking steps to rein in fees and predatory lending, has been gutted, for example.
- Last spring, the administration backed off a Biden-era rule that would've capped credit-card late fees at $8, unless banks could justify a higher fee.
- It also cleared a merger between Capital One and Discover that consumer advocates say will lead to high consumer costs.
Editor's note: This story has been updated to include a chart and additional details.
