President Trump’s latest economic idea has ignited a firestorm on Capitol Hill.
Trump has proposed a one-year cap on credit card interest rates at 10%, a plan he aims to implement by Jan. 20, marking the first anniversary of his second inauguration. Many Republicans are rejecting the proposal, citing potential negative impacts on credit access, while several Democrats have expressed interest in exploring it this week. The average credit card interest rate currently stands at about 20%, according to Bankrate, and the cap would limit fees charged to consumers who carry balances past their due dates.
According to NewsNation, the issue has sparked intense debate across party lines. While Trump’s proposal mirrors efforts by progressive Democrats and a handful of conservative voices to limit credit card rates, a majority of his own party stands firmly against it. They argue the plan is unsustainable and could harm the free market.
Rep. Rich McCormick of Georgia has voiced concerns about government overreach. He warned that even well-meaning interventions often lead to unintended consequences. “I’m not a big fan of government coming in with price controls,” McCormick stated, emphasizing his respect for Trump while disagreeing on this policy.
Rep. Eric Burlison of Missouri, a member of the House Freedom Caucus, echoed similar reservations. He stressed that competition in a robust market naturally keeps rates in check. Burlison cautioned that such a cap might make it harder for consumers to access credit.
The credit card industry is also sounding alarms. The American Financial Services Association, a trade group, noted that interest rates are designed to offset the risks of lending to less qualified borrowers. They warn that restricting rates could lead lenders to cut back on offering credit widely.
Speaker Mike Johnson of Louisiana, speaking at a press conference on Tuesday, urged caution. He suggested the House should carefully examine Trump’s idea to avoid harmful secondary effects. Johnson highlighted the risk that companies might stop lending or limit the amount of borrowing.
Senate Majority Leader John Thune of South Dakota raised parallel concerns. “I think that would probably deprive a lot of people of access to credit,” Thune said. He speculated that credit cards could essentially turn into debit cards under such restrictions.
On the other side, many Democrats are signaling a willingness to engage. Rep. Alexandria Ocasio-Cortez of New York has previously pushed for a similar 10% cap alongside Rep. Anna Paulina Luna of Florida in a bill introduced last year. She has called current interest rates excessive and is open to dialogue if Trump is serious.
Rep. Julie Johnson of Texas highlighted the financial strain on American families resulting from rising costs. She expressed a readiness to consider measures that could ease credit card burdens. Rep. Seth Magaziner of Rhode Island added that good ideas should be supported, regardless of political differences.
Rep. Shri Thanedar of Michigan welcomed Trump’s stance but questioned his commitment. While Sen. Elizabeth Warren of Massachusetts told Trump in a phone call that Congress could act if he pushes for it, skepticism remains about follow-through.
Trump’s proposal has reignited legislative activity in the Senate. Sen. Roger Marshall of Kansas plans to introduce a bill to codify the cap, while Sen. Josh Hawley of Missouri urges passage of his bipartisan measure with Sen. Bernie Sanders of Vermont. Yet, without broader congressional backing, the path forward remains murky.
Industry lobbyists are also poised to challenge the plan. Their influence could further complicate Trump’s ambitions, especially given past failures of similar legislation to gain traction. History suggests such proposals often stall amid competing interests.
For now, the debate over credit card rates reveals a rare fracture within Republican ranks. Trump’s push for consumer relief clashes with core party principles of limited government intervention. It’s a tightrope walk between populist appeal and economic orthodoxy.