Trump has said that the interest charged on credit cards in America for one year should not exceed 10%. Today, credit card interest on that can range from 20%–30%. If someone carries a $5,000 bill, the interest is very high.
Trump’s plan is:
Maximum interest should remain at only 10% for the next one year.
It means —
- People’s credit card debt will become cheaper.
- Monthly bills will decrease.
- Middle-class families will find relief.
- Banks and credit card companies may see a slight decrease in profits.
Example: If someone has $10,000 in credit card debt:
Interest Rate: 1 Year Interest
25% (currently) $2,500
10% (Trump Plan) $1,000
Direct savings of $1,500
This move is being seen as Trump’s attempt to “protect people from inflation and high prices.”
Trump is saying that credit card companies have robbed Americans because they charge exorbitant interest (20–30%). Leaders of both Republican and Democratic parties agree that credit card interest rates are too high and people are under financial pressure. This means this issue isn’t just Trump’s; both parties agree.
Trump only posted on social media. Actually his social media social truth.
But he didn’t say: When will the law come into effect? How will it be implemented? How will banks be forced?
He said a lot, but didn’t give a clear plan.
He had also made this promise during the 2024 election campaign, which he won, but at that time experts had said that such a rule would not be possible unless Congress passed a proper law on it. This means that Trump’s plan will become a reality only when Parliament, like Congress, officially approves it, otherwise it will remain just a political promise.
Economic Bombshell President Trump Announces Ban On Credit Card Interest Rates Above 10%!
— Alex Jones (@RealAlexJones) November 12, 2024
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Major parties agreed on credit card interest rates
Lawmakers from both Democratic and Republican parties agree that credit card interest rates are too high and should be lowered. Republicans currently hold a slim majority in both the Senate and House, so they could theoretically pass legislation if they wanted to. Some bills have already been introduced in Congress that seek to limit interest rates, but none have yet become law.
Senator Elizabeth Warren said that Trump’s announcement of a 10% interest cap is useless unless Congress passes a proper law on it. She said that simply urging credit card companies to “behave well” is ridiculous, because without a law, no company will reduce its profits. Warren also recalled that she had previously said that if Trump were serious, she would help pass the bill in Congress, but Trump instead tried to weaken the Consumer Protection Agency (CFPB), which protects people from financial abuse.
The White House did not provide further details. He simply stated that the President is capping rates, but did not clarify how or under what rules. Major credit card companies and banks, such as American Express, Capital One, JPMorgan, Citigroup, and Bank of America, also declined to comment. Meaning, neither the government provided a clear plan, nor did the banks say they would accept it—so the entire plan remains shrouded in uncertainty.
Politicians from both parties in America are worried about the exorbitant credit card interest rates. Trump critic Bernie Sanders (Democrat) and Josh Hawley (Republican) from Trump’s party had already introduced a bipartisan bill that planned to cap credit card interest at 10% for 5 years. This bill clearly states that credit card companies will not be legally required to charge interest above 10%, so that consumers can get relief.
Similarly, Alexandria Ocasio-Cortez (Democrat) and Anna Paulina Luna (Republican) have also introduced a separate bill in the House of Representatives that calls for capping interest at 10%. This means that not just Trump or one party, but both Democrats and Republicans consider high credit card rates a problem and want to control it.
Now, On what basis these rates decides…
These rates are decided by APR rates by credit cards companies. The question is what is APR and how it works ? Let me clear this quickly:
APR = Annual Percentage Rate
This means how much interest the credit card company will charge you throughout the year.
If a card’s APR is 24%, then:
If you borrow $1,000 and don’t pay the full bill, you will incur approximately $240 in interest over a year.
🔹How does a credit score determine APR?
Credit card companies rate each customer based on their risk.
Their logic is simple:
“The more trustworthy the loan, the cheaper the loan. The less trustworthy the loan, the more expensive the loan. “That’s why credit score is so important.
Currently interest rates of various credit cards
| Credit Card Issuer | Typical APR Range (Interest Rate) |
|---|---|
| Chase (Freedom, Sapphire, etc.) | 15% – 24% |
| Citi (Citi Double Cash, etc.) | 15% – 24% |
| Bank of America | 14% – 24% |
| Capital One | 17% – 27% |
| Discover | 17% – 27% |
| American Express | 17% – 28% (Premium cards can be higher) |
Really, all are happy with this decision
Bill Ackman, a billionaire investor who supported Trump in the last election, also called Trump’s 10% interest cap plan a “mistake.” This means that even Trump’s own supporters are unhappy with this policy.
Furthermore, last year the Trump administration removed a rule from Biden’s time that limited credit card late fees (late payment fines). Under Biden’s rule, the late fee maximum was $8, so that banks could not charge excessive fines from people.
The Trump administration told the court:
“This rule is wrong and illegal” and supported banks and business groups who wanted no limit on late fees. The court accepted the Trump administration’s argument and repealed the $8 late fee cap.
But people will happy on these rates capping
If the bill capping credit card interest at 10% is passed, Americans’ monthly credit card bills will be significantly reduced, allowing people to escape the burden of debt and use more of their income for savings and essential expenses. This will provide financial relief to middle-class and working families, reduce bankruptcies caused by medical and emergency bills, and curb the excessive profits of credit card companies. Ultimately, when people pay less interest and spend more money in their economy, the entire U.S. economy can become more stable and stronger.
Read Also —– https://dollarfeverr.com/why-americans-are-using-credit-cards-like-never-before/