NEW YORK (AP) — Americans would save roughly $100 billion a year in interest costs if President Donald Trump’s campaign proposal to cap credit card interest rates at 10% were implemented, according to a paper published by Vanderbilt University on Thursday.
Further, the banks and credit card companies would be able to withstand, and even still be profitable, if there were to be a national cap on interest rates. While limited in scope, the paper gives some academic backing to President Trump’s campaign promise.
The paper found that banks would still be able to earn a profit on most of their customers even if credit card interest rates were capped at 15%, and if the banks continued to offer rewards and perks like points and airport lounge access. If interest rates were capped at 10%, the business model gets more difficult for the banks, but they could still make money off most card customers by cutting back on some rewards.
Usury laws are as old as the Bible but have gotten traction again through Trump’s populist politics. When he was a candidate in the 2024 election, Trump proposed a temporary 10% cap on credit card interest rates. He has not spoken about it since the election.
That said, politicians have seized on the idea. Sen. Josh Hawley, R-Missouri, and Vermont Senator Bernie Sanders introduced a bill in Congress that would match Trump’s campaign proposal of capping interest rates at 10%. A similar bill was introduced in the House by Rep. Alexandria Ocasio-Cortez, D-New York.