The White House's new proposal has ignited debate about the cost of consumer credit and the role of the state in protecting users of financial products. Donald Trump has proposed setting a temporary 10% cap on interest rates applied to credit cards, an idea that, if implemented, would fundamentally disrupt the business model of banks and issuers.
The announcement comes at a time of social unrest due to the rising cost of livingWith many American families drowning in credit card debt and paying interest rates of 20% to 30% or even higher, this development is being watched with interest from Europe and Spain, where various limits and controls on usury already exist. It could reopen the debate about the extent to which it is reasonable to allow such high interest rates on a product used so frequently.
What exactly has Trump proposed and how would the limit work?
Trump announced his initiative through his social media network, Truth Social, claiming that consumers are being “scammed” by credit card companies which apply rates well above 20%. In his message, the US president explained that he is asking for a one-year cap restricting credit card interest rates to a maximum of 10%.
The date chosen to activate the cap is not accidental: the president wants it to come into effect on January 20, 2026This coincides with the first anniversary of his current term in the White House. The measure is presented as an annual and exceptional cap, unlike other longer-term proposals that have circulated in Congress.
Specifically, independent senator Bernie Sanders registered a Bill to also limit credit card interest rates to 10%But with a much longer validity: until January 1, 2031. That is, its legal framework would mean maintaining the ceiling for about nine years longer than Trump's proposal.
Despite the emphatic nature of the announcement, the president has not yet detailed the legal mechanism for implementing the 10% limit, nor whether it would depend on the voluntary cooperation of the private issuers or a direct intervention by the federal government based on a law passed by Congress.
Trump has insisted that during Joe Biden's administration, credit card interest rates will be lowered. They fired uncontrollably.This, he claims, justifies taking action now to "correct an abuse" affecting millions of households. The highly political tone of the message seeks to differentiate his administration from the previous one and present himself as a defender of the "defrauded public."
Political process: the role of Congress and the legislative battle
Beyond the media impact, the proposal needs the backing of the United States Congresswhere tough negotiations between Republicans and Democrats are expected. Without a specific rule, Trump's proposal would remain a mere statement of intent with no real effect on loan agreements.
Analysts suggest that the approval of some kind of limit cannot be ruled out, since Several legislators have shown interest in the past to limit the fees charged on credit cards. However, the final design of the measure—duration, exceptions, affected products, and penalties—will be key for the text to pass.
Within the Democratic Party, one of the most active voices has been that of Elizabeth Warren, Senator from Massachusetts and a prominent member of the Senate Banking Committee. Warren has long advocated for stricter financial consumer protection regulations in the United States.
The senator has demanded that Trump, if he is truly committed to the 10% cap, submit a formal bill that can be debated and voted on. According to Warren, “begging credit card companies to behave is a joke” and the only serious way forward is to cap interest rates in federal legislation.
There are also tensions within the Republican camp. While figures like Senator Josh Hawley have shown a explicit support While some support the initiative—even stating on social media that they "can't wait to vote in favor"—other sectors closer to big banking and the markets believe the plan could be counterproductive.
Reactions from the financial sector and the political world
Banking associations have quickly responded to the proposal. Banking Policy InstituteThe American Bankers Association, the Consumer Bankers Association, the Financial Services Forum, and the Independent Community Bankers of America issued a joint statement calling the 10% cap potentially “devastating.”
These groups claim to share the goal of doing more affordable access to creditBut they argue that such a low ceiling would reduce the availability of cards credit for higher-risk profiles. In their opinion, many clients would no longer meet the minimum profitability criteria and would be excluded from the formal system.
According to their argument, if issuers are forced to reduce interest rates without being able to adjust other components of the business in a comparable way—such as fees, solvency requirements, or credit limits—, Credit lines would be cut and millions of cards would be cancelled considered too risky.
Billionaire Bill Ackman, manager of the Pershing Square fund, has aligned himself with this critical view. He has called Trump's initiative a "mistake" and warns that it could push part of the population toward informal or much less regulated lenderswhich usually apply even higher rates and tougher conditions than traditional banks.
From progressive circles, figures like Sanders and Warren have also been very critical of Trump's record. They reproach him for having done things in the past that, despite his current rhetoric, have been problematic. supported the deregulation of large banks and has supported decisions that benefited the financial sector, such as the elimination of the $8 cap on late payment fees for credit cards, a rule originally promoted by the Biden Administration.
Immediate impact on markets and effects on banks
The announcement had a swift impact on the stock markets: major US financial institutions registered significant drops During the session following the publication of the message on Truth Social, investors reacted cautiously to the risk of a future forced margin reduction.
Among the major banks, Citigroup's shares fell by around 3,01%Meanwhile, JPMorgan fell approximately 1,41% and Bank of America dropped around 1,23%. The unease also extended to payment companies: Visa lost nearly 1,78% and Mastercard fell around -1,54%.
These corrections occur in a delicate moment for the sectorThis comes just as financial institutions prepare to present their results for the fourth quarter of 2025 and the full year. A regulatory cut to such a profitable product as credit cards will add uncertainty to profit forecasts.
For banks, credit cards are one of the highest-margin segments, especially among customers who finance balances month to month. rates higher than 20%A 10% cap would substantially reduce that source of income, forcing entities to review prices, fees, and granting criteria.
Some internal studies conducted by the sector suggest that, in a scenario of strict limits, the priority would be reduce exposure to riskFewer active cards, smaller credit lines, and stricter conditions for groups with worse payment histories.
What it would mean for consumers: debt relief and hidden risks
For indebted households, on paper the plan could represent significant relief. It is estimated that the average credit card debt The average monthly mortgage payment for Americans is around $7.000, with a typical interest rate close to 21%. Given this starting point, cutting interest rates to 10% would substantially reduce the annual cost of borrowing.
An analysis prepared by Brian Shearer, former deputy director of the Consumer Financial Protection Bureau (CFPB), on a similar proposal put forward by Trump during his campaign, concluded that the cap was technically feasibleAccording to their calculations, the measure could represent aggregate savings of more than $100.000 billion per year for American families, without necessarily making issuing banks unviable.
However, this potential benefit comes with several caveats. Economists critical of the plan point out that some customers with the worst risk profiles could see your cards have been cancelled or suffer drastic cuts in available credit limits, which would push them to resort to less regulated financing methods.
Furthermore, there are already precedents of economic policy decisions that, according to experts, have exacerbated tensions in the so-called “K-shaped economy”While high-income households continue to accumulate wealth, families with fewer resources face high prices, wages that do not grow at the same rate, and debts that are harder to sustain.
In this context, a segment of public opinion remains highly skeptical of the Trump administration's policies. Recent polls cited in US media indicate that around the 61% of the population He perceives that his decisions have worsened the country's economic situation, which complicates the political interpretation of any new measure, however popular it may seem at first glance.
The European mirror: caps on usury and customer protection in Spain and the EU
From Europe, the American initiative is viewed through the lens of the existing mechanisms to limit usuryAlthough there is no single cap applicable to the entire European Union, many countries have strict rules that, in practice, limit the maximum rates on consumer credit.
In Spain, for example, the Supreme Court has been developing a doctrine on the “significantly higher than the normal rate of interest”, especially in the case of revolving cardsThese prices are considered abusive when they disproportionately exceed the market average. This has led to numerous legal claims and increased scrutiny of these products.
Furthermore, European regulations on consumer credit require institutions to offer transparent information and solvency assessments regulations are more stringent than in the past, with the aim of reducing the risk of over-indebtedness. Although there is no 10% ceiling as such, the regulatory environment is, in general, more restrictive than in the United States.
If Trump's proposal were to succeed and prove effective in easing the financial burden without triggering a credit collapse, it could fuel a [unclear - possibly "crisis" or "crisis"] in the EU debate on setting lighter and more uniform ceilings for certain products, especially in vulnerable population segments. However, for the time being, European authorities are remaining cautious and continue to prioritize case-by-case monitoring.
For Spanish consumers, the American case serves primarily as reminder of the importance of comparing offersReview the actual APR of the cards and fully understand the conditions before financing purchases in long installments, even in a more protective regulated environment than the North American one.
Trump's initiative, with its mix of political componentsocial pressure and strong potential impact on banks and marketsThis brings back to the forefront of global debate the question of to what extent it is acceptable for a product as widespread as a credit card to apply interest rates that double or triple the usual cost of money, and whether legal limits are the right way to balance the scales between bank profitability and user protection.
