Trump's 10 percent cap on credit cards may hurt more than some imagine

Core Points - President Trump proposed a one-year cap on credit card interest rates at 10 percent, aiming to address consumer frustration with high rates [1][3][5] - The average credit card interest rate currently stands at 19.65 percent, down from 20.18 percent a year ago, but significantly higher than the proposed cap [5][11] - Bankers argue that a 10 percent cap could restrict credit access for consumers and small businesses, potentially leading to unintended consequences [15][17][19] Industry Impact - Approximately 61 percent of cardholders with balances have been in debt for over a year, indicating a growing issue with credit card debt among consumers [6] - The proposal for a cap on credit card rates is unprecedented, as there has never been a federal limit on such rates in the U.S. [14] - Bankers express concern that a 10 percent cap would drive consumers towards less regulated and potentially more costly credit alternatives [16][19] Consumer Behavior - Many consumers are currently facing high interest rates, with 47 percent of credit cardholders reporting they carry a balance and incur interest [6] - If the proposed cap were implemented, a $1,000 credit card debt at 10 percent would result in significantly lower interest payments compared to the current average rate [8][10] - The affordability issue is a significant concern for consumers, with calls for broader solutions beyond just capping credit card rates [28][29]