Khaberni - The American banking sector warned that President Donald Trump's plans to reduce credit card costs would make credit less available and harm consumers and businesses.
On Friday, Trump said he is calling from January 20, the first anniversary of the start of his second presidential term, to set a ceiling for credit card interest rates at 10%.
In a post on his Truth Social platform, he stated, "We will no longer allow credit card companies that charge interest rates between 20 and 30% to 'exploit' the American people."
In response, 5 associations representing American banks said they share the President's goal of making Americans "more capable" of affording credit costs.
In a joint statement issued by the associations on Friday evening, "At the same time, evidence shows that setting a cap of 10% on interest rates will make credit less available and will be devastating to millions of American families and small business owners who rely on their credit cards."
The statement added, "If activated, setting the cap will only lead consumers toward less regulated and more costly alternatives."
The statement was issued by the "American Bankers Association" (American Bankers Association), "Bank Policy Institute" (Bank Policy Institute), "Consumer Bankers Association" (Consumer Bankers Association), "Financial Services Forum" (Financial Services Forum), and "Independent Community Bankers of America" (Independent Community Bankers of America).
Credit cards are the primary source of consumer credit in the United States. Costs and outstanding balances have seen a significant increase in recent years as people increasingly rely on them to maintain spending, even on basic goods.
According to Federal Reserve data, the total outstanding debt on credit cards exceeded $1.23 trillion by the end of September.
Credit cards are the fourth largest source of household debt after mortgages, student loans, and car loans.
According to Federal Reserve data, interest rates on credit cards start at 21% and can rise to 38% depending on the borrower's profile and the associated lending risks.
This reflects a significant increase compared to interest rates that were close to 12% a decade ago.
As midterm elections approach in November, Trump faces pressure to cut living costs, a promise he made in his 2024 election campaign, with inflation remaining high and consumer complaints about the difficulty of covering expenses increasing.
Democratic Senator Elizabeth Warren, a member of the Senate Banking Committee, questioned the seriousness of Trump's commitment to setting a cap on interest rates, noting that he seeks to shut down the Consumer Financial Protection Bureau, a regulatory agency focused on consumer protection.
On Friday, Warren said in a statement that "begging credit card companies to be nice is ridiculous," adding that "Trump does not care about affordability."
