- Trump revived a pledge to cap U.S. credit-card APRs at 10% for one year starting January 20, 2026, far below today’s ~21% average.
- JPMorgan warned the cap would upend card economics, forcing banks to cut rewards and sharply restrict credit, especially for riskier borrowers.
- Analysts estimate consumers could save about $100B a year in interest, but banks and payment partners would take material hits.
- Markets sold off in banks and payments stocks on the headline, while the plan still faces major legal and congressional hurdles.
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On January 10–13, 2026, President Donald Trump renewed a campaign pledge to impose a 10% annual percentage rate (APR) cap on credit card interest rates for one year, to begin January 20 [search4][0news12]. Average U.S. credit card APRs currently float near 20–21%, implying a sharp undershoot from the status quo under such a cap [search4][search10].
JPMorgan, a major issuer in the industry, has sounded the alarm loudly. CFO Jeremy Barnum characterized the proposed cap as capable of being “very bad for consumers, very bad for the economy,” warning of dramatic changes to business operations, risk assessments, and product offerings if the cap becomes law [0news12][search3][search0].
Research from the Vanderbilt Policy Accelerator estimates that Americans would save approximately $100 billion annually in interest payments under a 10% cap, with a potential ~$48 billion savings if a 15% cap were used instead. However, those savings come at considerable cost, particularly to banks’ credit models and rewards programs. Lower-credit borrowers are expected to suffer the most [search1][search4].
From a policy and legislative lens, implementation remains murky. The proposal lacks defined legal mechanisms; it has been suggested a legislative path is necessary. House Speaker Mike Johnson and others say Congress should investigate the idea, but no bill currently moving is poised to deliver by the January 20 date [search18][search10][search4].
For markets: sectors most exposed—credit-card issuers, banks with large unsecured consumer portfolios, merchant reward partners including airlines—have already seen share price volatility. Investors are evaluating worst-case earnings risks, which could reduce net interest margins and viability of rewards-heavy products [0news21][search10][search6].
Supporting Notes
- JPMorgan CFO Jeremy Barnum said a 10% cap would reduce banks’ ability to price risk properly, potentially causing widespread credit access reductions for lower-credit-score borrowers. [0news12][search10][search8]
- Average credit card interest rate was approximately 20.97% as of November 2025. [search0][search10]
- Vanderbilt research suggests that a 10% cap would save Americans ~$100 billion per year in interest payments versus $48 billion if a 15% cap were applied; rewards programs and high-risk borrowers would be most affected. [search1][search4]
- The Electronic Payments Coalition estimates nearly all credit card accounts tied to credit scores below ~740 would be cut or restricted under a 10% rate cap. [search10]
- Bankers warn the proposal would force significant operational shifts, possibly even legal challenges, as current business models for cards are built around higher APRs. [search3][search11][0news14]
- No existing U.S. statute caps interest rates generally (outside federal credit union or military lending caps); implementation would require congressional action and clear legal grounds. [search4][search10][search11]
- Stocks of financial firms and payment ecosystem players (Visa, Mastercard, co-branded airline cards) dropped in response to fears of rate-cap impacts. [0news21][search6][search10]