In a bold move targeting financial institutions, US President Donald Trump has issued a stark warning to credit card companies, demanding they implement a cap on interest rates and threatening severe repercussions for failure to comply. This directive follows his earlier announcement of a proposed one-year cap, setting the stage for a potential clash between the White House and the banking sector.
The Ultimatum: Comply by January 20 or Face Consequences
Speaking to reporters, President Trump solidified his stance, declaring that credit card companies charging over 10% interest after January 20, 2026, would be in violation of the law. He warned of "very severe things" awaiting those who do not lower their rates. Trump justified the aggressive move by highlighting what he called an abuse of the public, stating that many are unaware they are paying rates as high as 28% to 30%.
"The people out there are working and they have no idea that they're paying 30%," Trump said. "We are putting a one-year cap at 10%... They (credit card companies) have really abused the public. I am not going to let it happen."
Announcement on Truth Social and Political Undercurrents
The President first unveiled this policy in a post on his Truth Social platform on Friday night. He framed the cap as a corrective measure to stop the American public from being "ripped off," a situation he claimed festered during the "Sleepy Joe Biden Administration." The chosen effective date of January 20 coincides with the one-year anniversary of his current administration.
This announcement arrives amidst the backdrop of the US political climate. Trump has reportedly told Republican aides that a loss in the upcoming November midterm elections could lead to his impeachment. Furthermore, the push to cap credit card rates aligns with his 2024 campaign promise to address the cost of living, a pressing issue for voters grappling with persistent inflation.
Banking Industry Pushback and Legal Hurdles
The proposal has been met with immediate and firm opposition from the financial industry. The American Bankers Association, along with allied groups, released a joint statement arguing that such a cap would backfire, driving consumers toward "less regulated, more costly alternatives."
Legal and financial observers have also pointed out a significant obstacle: such a mandate would likely require new legislation from Congress to take effect. This raises questions about the enforceability of Trump's January 20 deadline without congressional approval, setting up a potential constitutional and legal battle over executive power.
As the deadline approaches, the confrontation highlights a major policy divide. On one side is a President acting on a populist pledge to provide financial relief. On the other is a powerful banking industry and a legislative framework that may not support such a unilateral move. The outcome will have significant implications for American consumers, the banking sector, and the scope of presidential authority.
