President Trump is calling for a 10% cap on credit card interest rates for one year, an idea that has drawn strong support from lawmakers in both parties but pushback from card issuers.

"Please be informed that we will no longer let the American Public be 'ripped off' by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration," the president wrote on Truth Social late Friday.

Mr. Trump said the cap on interest rates should begin on Jan. 20, 2026, or the one-year anniversary of his second inauguration.

Credit card interest rates currently average over 20%, according to Federal Reserve statistics, so a 10% cap would represent a significant cut in borrowing costs.

It's unclear if the president will attempt to enforce his proposed 10% cap through some kind of executive action, or if his goal is to pressure credit card issuers to slash their rates voluntarily. CBS News has reached out to the White House and some of the largest credit card issuers in the U.S. for comment.

Supporters point to trillions in credit card debt

The idea of capping credit card interest rates has drawn bipartisan support. Last year, Republican Sen. Josh Hawley of Missouri and independent Sen. Bernie Sanders of Vermont, who caucuses with Democrats, teamed up to introduce legislation that would impose a 10% cap. A similar measure was also introduced in the House by Democratic Rep. Alexandria Ocasio-Cortez of New York and Republican Rep. Anna Paulina Luna of Florida.

Other recently proposed legislation would impose less stringent caps on fees and interest rates.

Mr. Trump also called for temporarily capping interest rates at 10% on the campaign trail. Hours before the president's late Friday Truth Social post, Sanders criticized Mr. Trump on X  for not following through on his pledge to limit interest rates.

Supporters of the idea say it would aid scores of Americans who are languishing under mountains of credit card debt, and argue that credit card issuers can afford to cut their rates. 

Americans owed a total of $1.23 trillion in credit card balances in the third quarter of last year, the highest level on record, according to the Federal Reserve Bank of New York. A 2024 study by NerdWallet found that the average U.S. household with credit card debt owed $10,563. Meanwhile, the Consumer Financial Protection Bureau found in 2023 that credit card rates have soared "far above the cost of offering credit."

"We cannot continue to allow big banks to make huge profits ripping off the American people," Sanders said in a joint press release with Hawley last year.

Said Luna: "For too long, credit card companies have abused working class Americans with absurd interest rates, trapping them in an almost insurmountable amount of debt."

Opponents argue a credit card rate cap could backfire 

Opponents of a cap, including banks and other credit card issuers, warn that limits on interest rates may force lenders to stop issuing credit cards to many riskier borrowers.

A coalition of groups that represent banks — including the American Bankers Association and the Bank Policy Institute — argued in a statement to CBS News on Friday that a 10% interest rate cap "would reduce credit availability and be devastating for millions of American families and small business owners who rely on and value their credit cards, the very consumers this proposal intends to help."

The Bank Policy Institute estimated last year that more than 14 million American households that rarely pay their credit card balances in full could have their access to credit eliminated or curtailed by a 10% cap. Millions of people who sometimes pay off their balances could also face new restrictions, the group said.

The American Bankers Association has argued in the past that if credit card issuers end up needing to cut off access for "all but the lowest-risk customers," many people who are in need of loans would be forced to shift to "less regulated alternatives" that often charge even higher rates, like payday lenders and pawn shops.

Billionaire investor Bill Ackman, who backed Mr. Trump in his 2024 campaign, called the idea a "mistake." He wrote on X that if card issuers are prevented from charging high enough interest rates to cover their losses and earn solid returns, "credit card lenders will cancel cards for millions of consumers who will have to turn to loan sharks."

Ackman later wrote: "Finding a way to bring down credit card rates without taking credit away from many Americans would have a very positive impact on the most disadvantaged Americans."

Scott Simpson, CEO of the trade group America's Credit Unions, told CBS News in a statement: "While we appreciate the President's desire to increase affordability, the plain truth is that capping rates at 10% does not make credit more affordable, it makes it unattainable for millions of working Americans because financial institutions will not be able to offer credit cards to most consumers at a 10% rate."

The Electronic Payments Coalition — which represents credit card issuers and payment networks — said "a one-size-fits-all 10% cap risks making things worse by reducing access to credit and limiting choice."

Trump pledges to deal with affordability

The push to cap credit card interest rates is the latest proposal by Mr. Trump to cut borrowing costs, as he grapples with widespread concerns about affordability.

Earlier this week, Mr. Trump directed the federal government to buy $200 million in mortgage bonds using cash from Fannie Mae and Freddie Mac, in an effort to drive down mortgage rates.

The president has also urged the Federal Reserve to more aggressively cut its benchmark interest rate, which influences borrowing costs for everything from mortgages and car loans to commercial loans — though rate cuts by the Fed could run the risk of causing inflation to surge.

Mr. Trump is expected to nominate a new Federal Reserve chair in the coming weeks, and told reporters last month he's "looking for somebody that will be honest with interest rates."

Emma Nicholson and Ryan Sprouse contributed to this report.