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The Electronic Payments Coalition and other banking industry groups late Monday warned that enacting President Trump’s proposed one-year 10% cap on credit card interest rates would cause the majority of credit card holders to lose access to credit.
President Trump, who first floated the proposal during his 2024 presidential campaign, broached the idea Friday in a post on the Truth Social platform, which is owned by the Trump Media & Technology Group. The president reiterated his stance during a press conference aboard Air Force One late Sunday.
Senators Bernie Sanders (I-Vt.) and Josh Hawley (R-Mo.) last year introduced legislation capping credit card annual percentage rates at 10%.
A study by the EPC says that between 82% and 88% of cardholders would lose access to the revolving lines of credit their cards provide. The reason, the EPC says, is that the proposed cap would not allow card issuers to price their cards to manage cardholder risk, especially for cardholders with a credit score below 740. Consumers with scores below 740 tend to be high risk.
“A credit score of 740 or below is where credit limits tend to get eliminated,” Richard Hunt, executive chairman of the EPC, said during a press conference late Tuesday. “A lot of low-and-moderate-income households that depend on credit cards would be affected.” Hunt added the average credit score is 715.
The EPC says it consulted with “subject-matter experts at various card-issuing banks (i.e., experienced industry professionals with deep expertise in credit card pricing),” then aggregated the data to estimate the likely impact of the proposed cap.
The American Bankers Association, the Bank Policy Institute, the Consumer Bankers Association, the Financial Services Forum, and the Independent Community Bankers of America, issued a joint statement echoing the conclusions of the EPC study.
The banking organizations said that while they “share the President’s goal of helping Americans access more affordable credit…evidence shows that a 10% interest-rate cap would reduce credit availability and be devastating for millions of American families and small businesses who rely on and value their credit cards, the very consumers this proposal intends to help. If enacted, this cap would only drive consumers toward less regulated, more costly alternatives.”
The banking organizations added that they “look forward to working with the administration to ensure Americans have access to the credit they need.”
It’s unclear whether the President’s proposed cap would be enacted by executive order or through a bill in Congress. If a bill is needed to enact the cap, it would likely require hearings and studies to determine the cap’s economic impact.
“This is something that has to be studied and have hearings on, and so far, that hasn’t happened in regards to the Hawley/Sanders bill. It’s also unclear how the 10% cap figure was arrived at,” Hunt says. “If 82% or more of cardholders lose their cards, that means 82% of cardholders will be angry with Congress, and I don’t know of any [United States congressman or Senator] that wants that.”
Hunt adds that the goal of the banking industry is to make Congress and the President aware of the economic impact capping credit card rates would have on the economy. “A cap on credit card interest rates will be a cap on the U.S. economy,” says Hunt.
In an unrelated post on Truth Social late Monday, President Trump voiced support for passage of the Credit Card Competition Act.
“Everyone should support great Republican Senator Roger Marshall’s Credit Card Competition Act, in order to stop the out-of-control Swipe Fee ripoff. Roger is a FANTASTIC Senator!!! President DJT,” President Trump posted.
The Merchants Payment Coalition issued a statement in support of the post.
