Good morning. President Donald Trump’s proposal to temporarily cap credit card interest rates has both supporters and critics. In a social media post on Jan. 9, Trump called for a one-year cap on credit card interest rates at 10% starting Jan. 20, reviving a pledge from his 2024 campaign as the administration seeks to demonstrate progress on affordability.
Supporters argue a temporary cap could ease pressure on households facing average APRs above 20%.
But economists and bank executives warn that the move requires approval from Congress and that the policy could have unintended consequences by making banks more reluctant to offer credit, thus slowing down consumer spending.
“An artificial cap on credit card interest rates is likely to backfire on the White House by making credit less accessible to the cash-strapped households that most need it,” Columbia Business School economics professor Brett House told me.
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