This previous Friday, President Donald Trump summoned his internal Sens. Bernie Sanders and Elizabeth Warren, and endorsed their long-running efforts to decrease bank card rates of interest.
“Please learn that we’ll not let the American Public be ‘ripped off’ by Credit score Card Firms which can be charging Curiosity Charges of 20 to 30%, and much more, which festered unimpeded throughout the Sleepy Joe Biden Administration,” he wrote on Reality Social. “AFFORDABILITY! Efficient January 20, 2026, I, as President of the US, am calling for a one yr cap on Credit score Card Curiosity Charges of 10%.”
Oh, now we care about affordability once more? It’s not a “hoax”?
For a Republican Occasion that has spent a long time branding worth controls as socialism and authorities overreach, that is about as socialist because it will get. Trump is proposing the federal authorities dictate the worth of client credit score throughout the financial system.
A minimum of Trump has observed one thing that genuinely harms Individuals, even when he conveniently ignores that bank card charges “festered unimpeded” throughout his personal first time period as effectively. Blaming former President Joe Biden will get previous. The one significant examine on bank card firms over the previous decade was the Shopper Monetary Safety Bureau, spearheaded by Warren and gutted by Trump as supposed “waste, fraud, and abuse,” regardless of having recovered greater than $20 billion for customers from most of the firms he now claims are ripping them off.
All that hypocrisy apart, Congress—and Democrats specifically—has hardly rushed to anger banks. It’s a humiliation that the solely laws filed throughout the earlier session of Congress to cap bank card rates of interest, at 18%, got here from insurrectionist Republican Sen. Josh Hawley, and that it had zero co-sponsors.
That improved a smidge final yr, when Sanders joined Hawley with a invoice to cap charges at 10%. Nonetheless, the one co-sponsors had been Sens. Kirsten Gillibrand of New York and Jeff Merkley of Oregon, each Democrats. Progress, positive, however hardly a motion.
The politics listed below are ugly for each events, but as a populist rallying cry, it’s undeniably efficient. Warren has stated she’d fortunately work with Trump to make his pledge a actuality—much less out of optimism, in all probability, than a willingness to name his bluff. As a result of if Trump’s personal phrases are taken at face worth, he’s not severe in any respect. Regardless of his most fervent fantasies, Trump shouldn’t be a dictator and can’t merely declare this into existence.
Trump even cites an “efficient” date of Jan. 20, treating coverage as if it may be manifested by proclamation. Worse, he instructed reporters aboard Air Power One which lenders who did not comply can be “in violation of the legislation.” He’s not calling for laws. He’s both pretending he can impose his will by fiat or truly believes he can. Both approach, it’s absurd as a result of, sadly, there is no such thing as a such legislation. No matter Grandpa Trump has rattling round in his head, it isn’t rooted in actuality.
On Tuesday, Home Speaker Mike Johnson even downplayed Trump’s push, saying the proposed cap might have “detrimental secondary results.”
And actuality is messier than Trump’s social media publish. As of this month, the typical bank card rate of interest sits round 24% and can exceed 30% for the riskiest debtors. That isn’t unintentional. Charges are greater as a result of lenders take in disproportionate losses throughout downturns, have little collateral to get better, and no assure how lengthy balances will stay excellent.
Even so, these realities don’t justify the business’s eye-popping earnings. As Sanders famous in early 2025, over the earlier 5 years, Visa made $67.5 billion in earnings, Mastercard made $44.3 billion, and American Categorical made $33.8 billion. This isn’t a fragile business managing threat; it is without doubt one of the most worthwhile sectors within the financial system.
Cap rates of interest, and lenders would nearly definitely reply by pulling credit score from the riskiest customers—typically, the poorest folks. Severe laws would wish to deal with that actuality, or it will threat pushing economically marginalized Individuals out of the formal credit score system altogether and towards much more predatory options. Whether or not these customers ought to have entry to bank cards in any respect is a good debate. Pretending the issue solves itself shouldn’t be a coverage.
And if lawmakers truly needed to focus on affordability whereas serving to small companies, they may additionally deal with the roughly 3% processing payment bank card firms cost retailers. These firms earn money on each ends of each swipe. They’ve perfected the artwork of compressing customers and companies concurrently. Regulating that may profit everybody besides their prime executives.
So, if Congress and the president genuinely cared about affordability, there can be lots to work with right here. However don’t maintain your breath. The extra probably rationalization is that Trump declared victory so his sycophants can declare “Trump capped rates of interest!” Individuals will examine their statements and see nothing has modified, however Trump is way extra invested in his alternate actuality than in delivering ends in ours.
Writing a social media publish is simple. Really caring about common Individuals would require confronting what would turn into among the many largest lobbying efforts in American historical past. And that isn’t going to occur.
