Trump called for a 10% credit card interest rate cap starting January 2026. Here’s the real status of the bill, current APRs, and what to do now.
Is There Really Going to Be a 10% Credit Card Rate Cap in 2026?
No — as of August 2026, there is no 10% credit card interest rate cap in effect anywhere in the United States. President Trump called for one, a bipartisan bill has been sitting in Congress since early 2025, and average credit card APRs are still running above 22%. Here’s exactly where the proposal stands, what it would mean for your wallet if it eventually passes, and what to do about high credit card interest in the meantime.
What Is the Proposed 10% Credit Card Interest Rate Cap?
It’s actually two related but separate proposals, not one single law. Both aim to cap how much interest credit card issuers can charge, but they came from different directions and have different terms.
- The legislative version: Sen. Bernie Sanders (I-VT) introduced the 10 Percent Credit Card Interest Rate Cap Act (S.381) in February 2025, cosponsored by Sen. Josh Hawley (R-MO), with a companion bill (H.R.1944) in the House led by Reps. Alexandria Ocasio-Cortez and Anna Paulina Luna. This version would cap APRs at 10% for five years, sunsetting in January 2031.
- The presidential push: On January 9, 2026, President Trump posted on Truth Social calling for a one-year, 10% cap on credit card interest rates, effective January 20, 2026. He reaffirmed this at the World Economic Forum in Davos on January 21, explicitly asking Congress to pass legislation.
Both proposals target the same number — 10% — but neither has become binding law.
Has the 10% Credit Card Rate Cap Actually Taken Effect?
No. As of August 2026, the cap is still just a proposal — it has not passed Congress, and no enforceable executive order has put it into force. Trump’s self-imposed January 20 deadline came and went without any legal mechanism compelling banks to comply.
- Sen. Elizabeth Warren sent a letter to the Federal Reserve, OCC, and FDIC in spring 2026 demanding they explain why no enforcement action had been taken, giving regulators a May 11 deadline to respond.
- S.381 and H.R.1944 remain stalled in their respective banking and financial services committees.
- Banks have not voluntarily lowered rates in response to the President’s request.
Average credit card interest rates reflect that reality: as of August 2026, the average APR on new card offers sits at 22.21%, while existing accounts carrying a balance average 22.15%, according to WalletHub. (Rates like this shift monthly — check Bankrate.com or WalletHub.com for the current figure before making any financial decision.)
Why Did President Trump Push for a 10% Credit Card Rate Cap?
The pitch was affordability relief for the roughly 175 million Americans who hold credit cards, according to the Federal Reserve Bank of New York. About 60% of cardholders carry revolving debt month to month, meaning they’re actually paying the interest rates in question rather than paying their balance off in full.
That debt burden has been growing. A Bankrate survey found that 61% of cardholders with a balance have been in debt for at least a year, up from 53% in late 2024. Total U.S. credit card debt now sits above $1.2 trillion, according to Federal Reserve data.
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What Would a 10% Rate Cap Mean for Your Wallet?
If a 10% cap actually took effect, cardholders carrying a balance would see a significant, direct drop in what they pay in interest each month. Researchers at Vanderbilt University estimate a 10% cap could save American consumers roughly $100 billion a year in aggregate.
To put that in personal terms:
- A household carrying an average balance in the $6,000–$11,000 range at today’s ~22% APR pays somewhere between roughly $1,400 and $2,500 a year in interest alone.
- Cutting that same balance to a 10% APR would roughly cut that annual interest cost in half.
- Over several years, that difference compounds into thousands of dollars that could go toward savings or paying down principal instead of interest.
These are illustrative ranges based on current average rates — your actual savings would depend on your specific balance, APR, and payment behavior.
What Are the Risks and Arguments Against a Rate Cap?
The banking industry’s opposition isn’t just self-interest — it points to real tradeoffs that deserve honest consideration alongside the potential savings.
Reduced Access to Credit
An American Bankers Association member survey found that 74%–85% of open credit card accounts nationwide could be closed or have their credit lines drastically reduced under a hard 10% cap, since issuers use higher rates to price in the risk of lending to less creditworthy borrowers. A separate April 2026 analysis from Unleash Prosperity projected the cap could push at least 64 million Americans out of the credit card market entirely — disproportionately people with lower credit scores who rely on cards as a credit-building tool.
Product and Pricing Shifts
If issuers can’t adjust interest rates to reflect risk, they tend to adjust something else instead:
- Reducing or eliminating cash-back and travel rewards programs
- Raising annual fees on cards that are currently fee-free
- Tightening underwriting standards, making approval harder for subprime and near-prime applicants
- Shortening or removing 0% introductory APR promotional periods
What Should Credit Card Users Do Right Now?
Don’t wait on Congress. Since it’s genuinely uncertain whether or when any cap becomes law, the most useful move is managing your current debt as if the current rates are here to stay.
- Attack high-APR balances first. Use the debt avalanche method — pay minimums on everything, then throw extra money at your highest-rate card.
- Look into 0% APR balance transfer offers. Many issuers still offer 12–21 month promotional periods, which can function like a personal rate cap while it lasts.
- Consider a personal loan for large balances. Fixed-rate personal loans are sometimes priced well below current average credit card APRs, especially for good-to-excellent credit.
- Know the caps that already exist. Active-duty servicemembers and their dependents are capped at 36% APR under the Military Lending Act, and can request rates as low as 6% during active duty under the Servicemembers Civil Relief Act. Federal credit unions are also statutorily capped, currently at an 18% ceiling set to expire in September 2027.
- Track the legislation, not the headlines. Follow S.381 and H.R.1944 directly on Congress.gov rather than relying on social media posts for status updates.
FAQ
Is the 10% credit card interest rate cap law yet?
No. As of August 2026, no federal law caps credit card interest rates at 10%. Both S.381/H.R.1944 and President Trump’s January 2026 directive remain proposals, not enforceable rules.
When would a credit card rate cap take effect if it passes?
There’s no set timeline. It would depend entirely on when — or if — Congress moves S.381/H.R.1944 out of committee and through both chambers; no vote has been scheduled as of this writing
What is the current average credit card interest rate in 2026?
As of August 2026, the average APR on new credit card offers is 22.21%, and existing accounts carrying a balance average around 22.15%, per WalletHub data. *[Check current figures — this number moves monthly.
Does the U.S. military already have a credit card interest rate cap?
Yes. The Military Lending Act caps APRs at 36% for active-duty servicemembers and their covered dependents, and the Servicemembers Civil Relief Act allows rates to be reduced to as low as 6% during active duty.
Would a 10% rate cap eliminate credit card rewards programs?
It could significantly reduce them. Industry survey data suggests issuers would likely respond to a hard rate cap by cutting rewards, raising annual fees, or tightening approvals rather than absorbing the cost.
About the Author
Allwin writes about personal finance and market data to translate fast-moving proposals — like the 2026 credit card rate cap debate — into clear, practical guidance for everyday cardholders.
