In a move that borrows directly from the progressive playbook, Donald Trump has announced a one-year cap on credit card interest rates at 10%. The former president revealed the plan on Truth Social, stating that it would take effect on January 20. By attacking “Credit Card Companies” for charging rates of up to 30%, Trump is adopting the rhetoric of economic populism usually associated with figures like Bernie Sanders.
The connection to Sanders is more than just rhetorical. In early 2025, Sanders and Republican Senator Josh Hawley introduced a bill with the exact same 10% cap. That bill failed to pass Congress due to heavy lobbying from the financial sector. Trump’s announcement came just one day after Sanders criticized him for not doing enough to curb Wall Street’s power. By unilaterally declaring the cap, Trump effectively outflanked his critic and claimed the issue as his own.
However, the economic reality is stubborn. The banking industry has warned that a price cap on credit will lead to a shortage of credit. In a joint statement, major financial groups argued that if they cannot charge rates that reflect risk, they will stop lending to risky borrowers. This could mean that millions of Americans with lower credit scores lose their credit cards overnight, a scenario that billionaire investor Bill Ackman described as inevitable if the policy is enforced.
Senator Elizabeth Warren remains skeptical of Trump’s sincerity and ability to execute the plan. She labeled the announcement a “joke” if it lacks Congressional backing, noting that Trump has a history of deregulating the very banks he is now attacking. Warren’s comments highlight the legal ambiguity of the situation: can a president simply order interest rates to fall, or is this merely a political statement?
Despite the hurdles, the announcement addresses a critical need. With credit card debt at a record $1.17 trillion, American families are hurting. Trump’s move acknowledges this pain and offers a simple, if controversial, solution. Whether it is a stroke of political genius or an economic misstep will depend on how—and if—it is implemented in the coming weeks.