Banks and lenders have been in a tizzy ever since President Trump posted on social media Friday night calling for a one-year, 10 percent cap on credit card interest rates. Those fees are a major profit source for card issuers, which for decades have fought legislative attempts to curb them.
But the president’s call seems to be more of a wish than a mandate: There is no obvious pathway for his administration to unilaterally impose an interest cap, and Congress has shown little interest in heeding his request.
Bank leaders and industry lobbyists are dancing around the topic, trying to avoid publicly disparaging the president’s decree while privately insisting it would backfire by limiting consumers’ access to credit.
Still, banks stocks have been hammered this week, particularly those with large credit card businesses like Capital One; its shares are down 7 percent since Mr. Trump’s post. Citi is down nearly 8 percent.
If lending is less profitable, banks say, they’ll be forced to slash credit lines and curb their credit-card offerings.
Capping rates is “probably not a great idea,” said Jamie Dimon, the chief executive of JPMorgan Chase, whose bank has the nation’s largest share of outstanding balances. “It’ll raise inflation expectations and probably increase rates over time.”
Will an Interest Rate Cap Become Reality?
Legal and financial experts say a federal credit-card interest cap would almost certainly require Congress to act — and so far, there’s no sign that Republican leaders are interested in doing so. Speaker Mike Johnson threw cold water on the president’s plan, saying it could have a “negative effect on a lot of people” because credit card companies may choose to cut off lending to some consumers.
Still, should the White House make a legislative push, there is some support in Congress on both sides of the aisle. Senators Bernie Sanders of Vermont and Josh Hawley of Missouri introduced a bill last year to cap fees at 10 percent for several years. Without the president’s support, the bill stalled, but it could be revived.
On Monday, Senator Elizabeth Warren of Massachusetts spoke about her economic vision for the Democratic Party. The president called her shortly after and discussed his desire to cap card rates.
“I said, ‘Great, let’s get something done,’” she said Wednesday on CNBC.
After calling for rate limits on the campaign train, Mr. Trump “had not lifted a finger to try to get something through,” Ms. Warren said.
Mr. Trump could try to force the issue with an executive order, but that would be quickly met by lawsuits from credit card companies. And the president can’t lean on the Consumer Financial Protection Bureau, the federal agency tasked with protecting consumers that his administration has largely gutted. Under the Dodd-Frank Act, the agency is prohibited from establishing “usury limits” — or interest rate caps — without an act of Congress.
How Much Would This Save Households?
Credit card debt in the United States now exceeds $1.21 trillion, and about 37 percent of American adults carry a credit card balance, according to data from the Federal Reserve.
Average interest rates have been trending up over the past two decades, to 22 percent in November. If those rates were brought down to 10 percent, consumers could save $100 billion a year, or about $899 per person, according to an analysis by researchers at Vanderbilt University.
How Much Would It Cost Lenders?
A cap would serve a heavy blow to banks and other credit card lenders’ bottom line, analysts and researchers said.
The industry brought in $160 billion from interest fees in 2024, according to an analysis by the consumer bureau — up more than 50 percent from the $105 billion lenders collected in 2022.
That’s more than financial giants made from other major profit areas like stock trading gains and commissions. Big banks collectively made $133 billion from their market trading in 2023, according to an analysis by two researchers at the Federal Reserve Bank of Boston and Harvard Business School.
Capital One, for example, made $22 billion in interest from its credit card business in 2024. A 10 percent cap would wipe out about half of those earnings, estimated Michael Miller, an analyst at Morningstar, a financial services firm.
“The lending model just doesn’t work in terms of mass market credit cards at a 10 percent cap on interest rates,” Mr. Miller said.
Would This Really Reduce Credit Availability?
Banks warn that a cap would mean that they will have to cut back on the amount of credit they offer rather than lend money at a loss.
“People will lose access to credit, like on a very, very extensive and broad basis, especially the people who need it the most, honestly,” Jeremy Barnum, the chief financial officer of JPMorgan Chase, said on the company’s earnings call on Tuesday.
Mike Santomassimo, the chief financial officer for Wells Fargo, offered a similar sentiment to reporters Wednesday morning, saying “there would be significant negative impact of credit availability for a wide spectrum of people.”
But some researchers point out that there are ways for the banks to issues credit cards with lower rates and still make money. In a 2025 analysis from the Federal Reserve Bank of New York, researchers concluded that marketing costs are a major factor in driving up rates.
“Credit card banks spend an average of 1 to 2 percent of assets annually on marketing — 10 times the proportion spent by other banks,” the researchers wrote. “The largest credit card banks rank among the world’s top marketers, with budgets comparable to consumer giants like Nike and Coca-Cola.”
Vanderbilt University suggested in an analysis that with a 10 percent cap, lenders could choose to decrease marketing budgets instead of credit lines while still making a profit. In that scenario, a reduction in credit availability would impact only the riskiest lenders — those with a FICO score of 600 or below.
The banks warn that in an attempt to increase affordability for average Americans, the White House may end up denying credit to households that are struggling financially and push them to alternatives, like payday lenders, that may charge even steeper rates.
What Happens Next?
Banks are steeling for a fight should the president try to turn his call into legislation.
Five major trade groups put out a public statement last week saying that they “share the president’s goal of helping Americans access more affordable credit.” But, the groups said, “evidence shows that a 10 percent interest rate 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.”
Banks and their lobbyists will continue to fight in public and private, said Erika Najarian, an analyst at UBS. They will warn borrowers that a cap would limit credit availability; privately, she said, they may offer Washington concessions in exchange for dropping the proposal.
President Trump said he wanted the cap to take effect on Jan. 20 — the one-year anniversary of the start of his second term.
With less than a week to go until that deadline, no major lender has voluntarily slashed its rates. And with Congress showing no urgency to make legislative moves, industry analysts think the most likely outcome is that the president’s call will go unanswered, at least for now.
Stacy Cowley is a Times business reporter who writes about a broad array of topics related to consumer finance, including student debt, the banking industry and small business.
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