Trump's Plan to Cap Credit-Card Rates Has Risks for Consumers

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00:00President Trump says he wants to ease the burden of credit card debt, but his latest moves could have ripple effects.

00:05First, Trump called on credit card companies to cap interest rates at 10% for a year.

00:10That's far below today's average of around 20%.

00:13Now he's also going after the fees merchants pay every time a consumer taps or swipes their card,

00:18backing a proposal in Congress to increase competition among payment networks.

00:22JPMorgan Chase is pushing back, warning that changes could significantly disrupt its business

00:27and hurt both the bank and its customers.

00:31It's unclear whether or not Trump actually has the power to enforce that,

00:34but the message still spooked investors and set shares of major banks and credit card-related firms lower.

00:39Credit card debt has been climbing as everyday costs stay high,

00:43and many people rely on plastic to cover surprise expenses.

00:46In 2024, the average annual percentage rate, also known as APR,

00:51reached 25.2% for general-purpose cards and 31.3% for private-label credit cards,

00:58the highest levels since at least 2015.

01:02While lower interest rates sound like a win for consumers, experts warn the move can backfire.

01:07Banks could respond by cutting off riskier borrowers, raising fees, or increasing minimum payments,

01:12making credit even harder to get for the very people this policy is meant to help.

01:16This push comes as the Trump administration tries to show voters it can rein in the cost of living ahead of the midterms.

01:23Lawmakers from both parties have floated similar ideas before, but banks have long pushed back.

01:28For now, Trump has set a January 20 deadline and says that lenders would be quote-unquote breaking the law

01:33if they don't comply, though he hasn't yet explained what that law would be.