Trump’s Credit Card Rate Cap Could Save Americans $100B Annually

Americans could save around $100 billion each year in interest charges if a proposed 10% cap on credit card interest rates were enacted, according to a new study from Vanderbilt University published Thursday. The research offers academic support for a campaign proposal by President Donald Trump, who suggested a temporary nationwide cap during his 2024 presidential run — though he hasn’t publicly revisited the idea since the election.

The study also challenges claims from the banking industry that such caps would ruin the credit card business model. According to the research, banks and credit card companies could still turn a profit even with a 10% interest rate ceiling, although they might need to scale back certain customer rewards. At a 15% cap, the study found, most banks could continue offering perks like points and lounge access while remaining profitable.

Despite its limited scope, the study has already sparked political interest. Senators Josh Hawley (R-MO) and Bernie Sanders (I-VT) have introduced legislation mirroring Trump’s proposed 10% cap. A similar bill has also been put forward in the House by Rep. Alexandria Ocasio-Cortez (D-NY).

The banking industry strongly opposes any rate caps, arguing they would severely undermine the economics of credit cards and threaten popular rewards programs used by millions of consumers for benefits like free flights and hotel stays.

However, the Vanderbilt study suggests otherwise. Since rewards programs are mostly funded through interchange fees, widespread cuts to perks are unlikely. The most significant reductions would likely affect customers with lower credit scores, who are considered higher risk. Still, the study’s author, Brian Shearer — a former official at the Consumer Financial Protection Bureau — argues that even these customers would come out ahead financially thanks to the interest savings.

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