Trump floats temporary cap of ~10% on credit card interest rates – report

Former President Donald J. Trump has suggested a temporary cap on credit card interest rates of about 10% during a campaign speech, according to media reports. However, Trump, if he wins in November, will have to get Congress to pass legislation to implement the policy.

An APR of 10% is less than half the current average credit card APR of 20.78%, according to Bankrate data. The average retail credit card APR is 30.45%, the firm said earlier this month.

Consumers’ credit card debt reached a record of $1.14T in Q2 2024, the Federal Reserve Bank of New York said in August. Over the last year, ~9.1% of credit card balances moved into delinquency, the report said.

BTIG’s Isaac Boltansky wrote in a note, “We believe the odds of credit card interest rate cap legislation becoming law in the next Congress are no higher than 10% given the combination of political and economic realities.”

He also expects that a Trump administration would nix the Consumer Financial Protection Bureau’s credit card late fee cap. In March, the CFPB issued a final rule to cap credit card late fees at $8, down from the previous cap of $32. But in May, a U.S. district court temporarily blocked the rule.

Relevant tickers include Capital One Financial (NYSE:COF), Discover Financial (NYSE:DFS), American Express (NYSE:AXP), Synchrony Financial (NYSE:SYF), and Bread Financial Holdings (NYSE:BFH). Megabanks JPMorgan Chase (NYSE:JPM), and Citigroup (NYSE:C), Bank of America (NYSE:BAC) also have significant credit card businesses.

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