Credit card interest cap could ease costs in the short term

U.S. President Donald Trump has proposed capping credit card interest at 10 per cent, which the article says could provide short-term relief but experts warn it may reduce credit availability and harm lower-income households over time.

U.S. President Donald Trump has proposed a 10 per cent cap on credit card interest and is urging Congress to enact legislation. The proposal is framed as a response to rising household debt and high credit card rates that averaged about 23.8 per cent in January. Credit card companies have not imposed the cap, and the idea has drawn both support and criticism from lawmakers and industry figures. Experts and banking groups have highlighted potential short-term relief alongside longer-term risks. Key points: - Trump proposed a 10 per cent cap on credit card interest and has called on Congress to turn the proposal into law. - Credit card issuers have not implemented such a cap, and banking organizations have warned the limit could cause significant industry losses. - Economists quoted in the article say a rate cap could briefly ease household debt burdens but could also reduce the availability of credit and slow economic activity, which may affect lower-income households. - Some lawmakers, including senators who previously introduced a 10 per cent APR bill and figures like Elizabeth Warren, support limits, while other Republicans have cautioned about unintended effects. Summary: The proposal could provide short-term relief for some consumers but experts and industry groups warn of broader effects on credit supply and the economy. Whether Congress will enact a rate cap is undetermined at this time.