Trump Calls For 10% Cap On Credit Card Interest Rates, Bill Ackman Calls It A ‘Mistake’

Donald Trump wants to put a 10% cap on interest rates on credit cards, a move that had previously been taken up by Congress but had never made into law.

• President Trump stated he is exploring a one-year 10% credit card interest rate cap, calling 20–30% rates unjust and promoting customer affordability.
• The suggestion comes as U.S. credit card balances jumped from $1.21 trillion to $1.23 trillion and household debt surged $197 billion in Q3 2025, mostly due to mortgages and school loans.
• Billionaire Bill Ackman warned that rate restrictions might force lenders to cut credit availability for millions, and prior congressional initiatives to cap rates failed.

On Friday, President Donald Trump said that he was considering imposing a one-year term of 10% cap on credit card interest rates, arguing that the current rates of 20 to 30% are unfair to American consumers. 

President Trump framed the proposal as a measure to make credit cards more affordable and criticised credit card companies for overcharging Americans, adding that the policy would take effect on January 20.

While many praised the President on the limit placed on credit cards, Pershing Square Capital Management CEO Bill Ackman pointed out that “without being able to charge rates sufficient to cover losses and generate an adequate return on equity, credit card lenders will cancel cards for millions of consumers.” Ackman called it “a mistake” and proposed that “regulatory changes that enable new entrants could lead to a reduction in rates.” 

Previously, Congress had tried to consider legislation to cap interest rates on credit cards, but none made it into law.

Record US Consumer Debt Adds Pressure on Households

This comes at a time when credit card debts hit a record high in 2025. From the third quarter to the fourth quarter, credit card debts have skyrocketed from $1.21 trillion to $1.23 trillion, according to the Federal Bank of New York. Household debt in the United States rose by $197 billion in the third quarter of 2025, continuing a trend that is putting it on course to surpass levels last reached before the financial crisis, according to the latest quarterly report on household debt and credit. 

The bank also states that most of the increase was driven by mortgage balances, which rose $137 billion to $13.07 trillion as activity related to mortgages increased, with $512 billion in New mortgage loans issued during the quarter. However, student loan balances increased by $15 billion to $1.65 trillion over the quarter. 

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