Former President Donald Trump has proposed capping credit card interest rates at around 10% if he is re-elected, aiming to provide relief for working Americans struggling with rising debt. Credit card debt has been increasing, with an average balance of $6,329 in 2024, leading to a delinquency rate of more than 3%. While Trump’s proposal could have a significant impact on consumers and the financial industry, it would require congressional legislation to implement as federal law currently allows states to set interest rate limits. Despite skepticism about the feasibility of passing such a measure, Trump’s proposal highlights the growing concern over high credit card interest rates and the need for reform.
Critics argue that a 10% interest rate cap could backfire, leading banks to restrict credit access for higher-risk consumers or increase penalty fees to offset profit losses. Consumer advocates emphasize the importance of finding a balance between alleviating financial burdens for consumers and ensuring the viability of the banking industry. While Trump’s proposal may face challenges in implementation, it underscores the ongoing debate around regulating credit card interest rates to protect consumers from excessive fees and charges. The potential impact of such a policy on access to credit, financial stability, and consumer protection remains a topic of contention among experts and policymakers.
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