Trump Proposes Credit Card Interest Rate Cap

Experts criticize the plan, but the former president may be onto something, says author.

Apr. 11, 2026 at 6:33pm

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In a controversial move, former President Donald Trump has proposed a 10% federal cap on credit card interest rates. While the plan is unlikely to succeed, the author argues that Trump has identified a real problem - the high interest rates and fees charged by credit card companies, which have become a burden on the lower and middle classes. The article explores the history of usury laws, the impact of the Supreme Court's Marquette decision, and the high margins enjoyed by credit card issuers.

Why it matters

Credit card debt and high interest rates have become a major financial burden for many Americans, especially those in the lower and middle classes. Trump's proposal, while imperfect, highlights an issue that deserves more attention and potential legislative action.

The details

Until 1979, all states had usury laws limiting permissible interest rates. But a Supreme Court decision that year, Marquette National Bank v. First of Omaha Service Corp., allowed national banks to charge the interest rates of their home states, even for transactions with out-of-state customers. This led to a 'race to the bottom' as banks flocked to the states with the most permissive usury laws, like Delaware and South Dakota. Today, credit card companies enjoy estimated profit margins of around 10% on their credit card business, even after accounting for charge-offs. The average credit card interest rate is around 24%, well above what would be needed to cover losses.

  • In 1979, the Supreme Court issued its Marquette decision.
  • In the fourth quarter of 2024, credit card companies charged off 4.1% of credit card loans as losses.
  • In 2009, the credit card charge-off rate reached as high as 7%.

The players

Donald Trump

The former president who has proposed a 10% federal cap on credit card interest rates.

William Brennan

The Supreme Court justice who authored the majority opinion in the Marquette decision.

George Liebmann

The author of the article, who is the president of the Library Company of the Baltimore Bar and has written extensively on law and politics.

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What’s next

The author suggests that the appropriate remedy is for Congress to overturn the Marquette decision, allowing states to regulate loans to their own citizens. This would put the issue in the hands of state legislators who are 'in closer touch than the lawyer-legislators of Washington to the adversely affected class'.

The takeaway

While Trump's proposal for a 10% federal cap on credit card interest rates is unlikely to succeed, he has identified a real problem that deserves more attention. The high interest rates and fees charged by credit card companies have become a significant burden on the lower and middle classes, and legislative action at the state or federal level could provide relief.