Trump's 10% credit card interest cap could hurt borrowers, experts say: 'Access to credit would dry up'

• Former President Donald Trump's call to curb credit card interest rates to 10% may have unintended consequences, financial experts and consumer advocates say.
• "Access to credit would dry up," said Ted Rossman, a senior industry analyst at Bankrate.
• "A president cannot set a cap on credit card interest rates," said a leading consumer advocate.

Former President Donald Trump has made headlines over the past week with yet another surprise economic policy announcement. After promising free in vitro fertilization treatments for women, no federal income tax on tips, tax-free overtime pay and no income tax on Social Security benefits, Trump now says that if he is elected president in November, he will cap credit card interest rates at around 10%.

"While working Americans catch up, we're going to put a temporary cap on credit-card interest rates," the Republican presidential nominee said at a rally in New York on Sept. 18. "We can't let them make 25% and 30%."

Trump's promise falls in the home stretch of an extremely close presidential race between him and the surprise Democratic nominee, Vice President Kamala Harris. It's also a moment in which credit card debt is heavily burdening many U.S. households.

The average credit card balance was $6,329 in the second quarter of 2024, compared to $4,828 during the same period in 2021, according to TransUnion. The current delinquency rate of more than 3% is the highest since 2011, Federal Reserve data shows.

Trump's proposed rate cap, if enacted, would have a huge impact on both consumers and on the financial industry.

The average interest rate on credit cards is currently over 20%, with some cards charging as much as 36% APR, said Ted Rossman, a senior industry analyst at Bankrate.

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