Is a Crackdown on Credit Card Interest Rates of 20-30% Coming? Trump's "10% for Just One Year" Declaration Causes a Stir

1. The "Credit Card Interest Rate" is Now at the Center of Politics

In a phase where high prices and rising living costs continue, credit card balances, which often become the household's "last cushion," tend to swell. Once you enter into revolving or installment payments, the interest burden chips away at your monthly disposable income, extending repayment like a snowball effect. As a receptacle for such dissatisfaction, President Trump proposed a "cap on credit card interest rates."

According to Seeking Alpha (news section), Trump has proposed a plan to "cap credit card interest rates at 10% annually for one year," with implementation starting January 20, 2026. The focus is on the high interest rates currently seen in the 20-30% range.

2. What Was Said: One-Year "10% Cap," But Means Are Unclear

The origin was the president's own social media post. According to reports from various media outlets, Trump expressed on Truth Social his intention to cap interest rates at 10% annually, stating he would not allow the public to be "ripped off."

However, the main point of contention begins here, as how it will be implemented remains unclear. Reuters reports that "details on how the plan will be implemented and how companies will be made to comply have not been provided."

Furthermore, industry groups have announced that "the administration plans to impose a temporary 10% cap via executive order," suggesting the possibility of administrative means, but uncertainties remain, including legal hurdles.

3. The "Foundation" Already Exists: Bipartisan 10% Cap Bill

This theme itself is not sudden. There is a bill in Congress to cap credit card interest rates at 10%. For example, Congress.gov clearly states the intent to set a cap for a certain period under the "10 Percent Credit Card Interest Rate Cap Act."
Reuters also outlines the background of a bipartisan bill proposed by Senators Sanders and Hawley to cap rates at 10% for five years.

In other words, Trump's recent "directive" is currently interpreted in different ways: (1) whether it will be done swiftly through administration, (2) whether it's a political message to support legislative action, or (3) whether it's a "voluntary price reduction pressure" on card companies.

4. Expected Benefits: Reduced Interest Payments = Immediate Relief for Households?

If a 10% annual cap is widely applied, the reduction in interest payments would immediately benefit households. Current card interest rates are said to average around 20%, making 10% close to "half" of that.

The more people hold balances, the more their monthly interest will decrease, making the end of repayment more visible. Politically, it certainly appears to be a policy that directly addresses the "pain points" of consumers.

5. Core of the Backlash: Price Controls Leading to "Credit Contraction"?

On the other hand, the financial industry's backlash is swift. A joint statement from banks and industry groups warns that "a 10% cap will reduce credit provision, ultimately hitting households and small businesses," and will "push them towards less regulated, high-cost alternatives."

The reasoning is as follows: Credit cards are unsecured credit, and interest rates are a "price" that incorporates the risk of default. Reuters introduces the view from a strategist at an asset management company that if risks cannot be priced appropriately, "credit limits will be reduced, or credit itself will be stopped."

The more the cap is enforced, the more cards will be taken away from those with lower creditworthiness (subprime), leading them to other high-cost products like BNPL (Buy Now, Pay Later) or payday loans—this is the concern.

6. How Does the Market View It? Why "Card Stocks" Are Featured in Articles

In the headlines of Seeking Alpha articles, names of companies involved in cards and personal credit like Capital One (COF), American Express (AXP), and Synchrony (SYF) appear. From an investor's perspective, an interest rate cap could directly hit their revenue models.

However, at this stage, since it is "not yet established as a system," it is too early to determine its impact on stock prices. But as the policy becomes more concrete, (1) interest margins, (2) defaults, and (3) revisions in member acquisition and rewards (returns) design will become points of contention.

7. Reactions on Social Media: Welcome, Anxiety, and "Can It Be Done?" Debate

This topic is also "social media-born" and has been amplified on social media. The representative reactions can be broadly divided into four categories.

(A) Welcoming as Household Relief
There is agreement from a consumer perspective, such as "20-30% is too much," and "reduce the number of people trapped by interest." Trump's post itself also highlights the issue of "excessive interest rates."

(B) "Can It Really Be Done?"—Skepticism About Feasibility
As Reuters points out, the lack of concrete measures is the biggest spark. Doubts have spread, such as "Is it really possible through an executive order?" and "Won't Congress ultimately be needed?"

(C) Concerns Over Credit Contraction: Will Card Cancellations and Credit Cuts Occur?
Even investor Bill Ackman, who has expressed support for Trump, posted on X saying "this is a mistake" (later deleted), suggesting the risk of card companies moving to mass cancellations due to unprofitable operations.

In a subsequent post, he clarified his concerns, stating "the goal is important, but a 10% cap cannot price the risk of subprime, leading to cards being taken away."

(D) Political Exchange: Both Support and Opposition Connect to "Attacking the Opponent"
Democratic Senator Warren dismissed it by saying "it means nothing without a bill," while also criticizing the administration's stance on financial regulatory bodies (CFPB).

On the other hand, Republican Senator Hawley expressed his welcome on X, saying "great idea, can't wait to vote."
Additionally, it was reported that Senator Sanders criticized Trump on X just before the announcement for not fulfilling past promises.

In essence, social media is simultaneously running with the excitement of a "consumer relief measure," the fear of "side effects of price control," and the cynicism of "isn't this just political performance?"

8. Future Focus: When, Who, and in What Form Will It Be Decided?

The future checkpoints are simple.

• Framework of the System: Is it an executive order, congressional legislation, or (perhaps an industry self-response)?

• Scope of Application: All cards? Only new issuances? Existing balances too? (Without this decision, impact estimation cannot be made)

• Measures Against Side Effects: Safety nets in case of credit cuts (lower-income groups may be more affected).

Even if one is in full agreement with the single point of "lowering interest rates," the reality of finance is a world of "risk and price." Whether the 10% annual cap becomes a lifeboat for households or narrows the entrance to credit—the conclusion will vary greatly depending on the concreteness and design of the policy.