Trump's Credit Card Rate Cap Proposal Faces Wall Street Skepticism

Congressional Approval Doubtful

US President Donald Trump's proposal to cap credit card interest rates at 10% has encountered significant skepticism from Wall Street analysts, who doubt its chances of being approved by Congress ¹

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Source 2

https://internasional.kontan.co.id/news/trump-usul-batas-bunga-kartu-kredit-10-analis-nilai-sulit-disahkan

. The credit card industry is a crucial component of consumer financing in the United States, offering households flexibility in their spending. However, the associated high interest rates often lead to rapidly accumulating debt if not paid off promptly. For banks and credit card issuers, these high rates and related fees are primary sources of profit.

Long-Standing Debate in Washington

The debate over capping credit card interest rates has been ongoing in Washington for years. Proponents argue that such a cap would protect consumers from exorbitant rates, while opponents warn that it could limit access to credit, particularly for lower-income households. The proposed 10% cap has reignited this discussion, highlighting the complex balance between consumer protection and maintaining access to credit.

Impact on Consumers and Lenders

If implemented, the proposed cap could significantly impact both consumers and lenders. Consumers might benefit from reduced interest expenses, potentially easing debt burdens. However, lenders might respond by tightening credit standards or increasing fees in other areas, potentially offsetting some of the benefits. The overall effect would depend on how lenders adapt to the new regulations and how consumers adjust their borrowing behavior.