Details are scant, and I’m not exactly sure how this would work, but President Trump has proposed a one-year freeze on credit card rates at 10%.
[SOURCE]
As noted by Politico, previous “legislation sponsored by Sen. Bernie Sanders (I-Vt.) and cosponsored by Sen. Josh Hawley (R-Mo.) would impose a 10 percent cap on credit card rates for five years. Similar legislation has been introduced in the House.” Yet, unilateral authority by a President does not seem evident.
If anyone has any information on how this could be accomplished, feel free to share. I’m not sure how this can be done.
“If anyone has any information on how this could be accomplished, feel free to share. I’m not sure how this can be done.”
Under enough socialism, anything is possible.
This will definitely be supported by the left. Maybe he’s aiming to pick off some votes for the mid terms.
He’s going to ask the credit card CEOs to do it as a favor to him. Like that’s a nice credit card company you got there…
Exactly. PDJT can be very persuasive, e.g. eight wars canceled, some had thirty odd years on the odometer. Art of the Deal.
He should make the same request if his AG and FBI director.
Yeah, but we’re talking about a minimum of $150 Billion per year that the CC companies would not make/lose over that 10% rate figure compared to current average of 21% rate for credit cards.
Currently around $1.39 Trillion in CC debt x 11% (Average rate of 21%-10%=11%) = $152.9 Billion loss. I don’t think that will happen. Yeah, 20%-30% interest rates are highway robbery, but its what the market is willing to bear.
THIS^^^^
US Consumer Debt: Total outstanding reached ~$5.08 trillion in November 2025 (latest Fed G.19 report, released Jan 8, 2026). Revolving debt (mostly credit cards) is $1.31 trillion, down 1.9% annualized in Nov but up ~5% YoY overall. Non-revolving (auto/student loans) is $3.77 trillion, up 2% annualized. Growth slowed to 1% annualized in Nov (from 2.2% in Oct), signaling strain.
Broader US Household Debt: Hit $18.59 trillion in Q3 2025 (New York Fed report), up 1% QoQ and ~5% YoY. Breakdown:
Seems like someone is carrying a balance, although you couldn’t tell from the comments here on CTH. Everyone here is perfect.
We might not be perfect, but we’re certainly beautiful and above average 🤣
Learned that lesson young and why I have no need to carry a balance, if you are carrying a balance you have had an major emergency or you are overspending.
When I was younger there were periods when I had to carry a balance, but I always tried to get to 0 asap.
Now, I miss a payment date sometimes and pay the price, lol. Yes, I am a work in progress.
Far from perfect, frugal with money.
Seems like a rather snide comment to make here, Joan.
The Good Lord and we know that we are not perfect, but we do tend be conservative, including fiscally, in our chosen life paths. That’s exactly why most of us gather together and seek refuge here at The Conservative Tree House.
This also happens to be the top story in this morning’s Coffee & Covid substack.
With good background.
This was a good explanation from an X user:
“Credit card rates are governed by the National Bank Act, which lets nationally chartered banks charge interest based on the rules of their home state. That’s why so much credit card lending runs through places like Delaware and South Dakota. That setup was locked in by the 1978 Supreme Court case Marquette v. First of Omaha, which basically said banks can export their home state rate nationwide. A president can’t override that by executive order.
An executive order could tell agencies like the CFPB, OCC, FDIC, and even the Federal Reserve to study the issue, tighten supervision, or lean on banks through enforcement and exams. But without Congress changing the law, usually by amending the Truth in Lending Act or the National Bank Act itself..a hard 10% cap wouldn’t legally stick and would almost certainly get challenged in court.
That said, pressure still matters. Banks care deeply about regulatory heat and public optics. When a president is openly calling 20–30% APRs a rip off, regulators start asking questions, headlines turn ugly, and banks start managing risk. You probably don’t get a clean 10% cap, but you can see behavior shift at the margins with more promo rates, lower APRs for prime customers, expanded hardship programs, fee tweaks, or quieter changes meant to avoid looking predatory.
So he’s basically setting an anchor. A simple number people instantly understand. It reframes the issue from abstract rates or monetary policy to “banks are gouging consumers,” which plays well when households are under pressure. More importantly, it signals to banks that this could become real legislation if the economy weakens and Congress feels forced to act.
So i believe this is less about the mechanics of law and more about leverage and timing. Credit cards are the most visible consumer pain point. He’s planting a flag there early. If Congress moves, he claims the win. If banks preemptively adjust, he still claims success. And if nothing changes, he still owns the narrative. That’s the real play.” — @onechancefreedm, 9 Jan 26
“So he’s (Donald J. Trump) basically setting an anchor. A simple number people instantly understand. It reframes the issue from abstract rates or monetary policy to “banks are gouging consumers,” which plays well when households are under pressure. More importantly, it signals to banks that this could become real legislation if the economy weakens and Congress feels forced to act.”
You are right, PeanutButter. … An interest cap on credit cards will appeal to almost all Americans, and will also enlarge Donald J. Trump MAGA base. … Many voters will wonder why all the fake-news sympathy for the Somalian and other fraudsters, when we should lower the credit card rates and help all Americans.
Yes, basically Trump can use regulatory authority on the banks..unrelated issues but ones that pressure the card companies to comply.
Yes, that is one of the most damaging SC cases. IIRC, the Court “reasoned” that if a credit card customer could have driven to South Dakota and signed the card agreement there, SD interest law would apply, so its the same thing if a customer signs up with a bank that has a S.D. office from another state. So S.D gets a few offices, and all of the usury laws of the states other than S.D and Delaware are obsolete.
The SC ‘interpreted’ a federal law, leaving it to Congress to fix this problem, but Congresss has not done so in the past half century.
The banks get to borrow money from the FED at low rates (less than 1% until recently) and charge 25-30% interest in addition to the several percent charge to the merchant for handling the transaction. The current rate is about 3.5% so the banks borrow at 3.5% and charge 25-30% interest to credit card users.
If PDJT can get appropriate members of the FED, it might be possible for the FED to limit credit card interest to 10% as a condition for lending to the banks
Genius!
Gold is the currency of kings
Silver is the currency of the aristocracy
Barter is the currency of the peasant
Debt is the currency of the slave.
The high credit card rates are a product of a slave master’s mentality who is orchestrating a system of debt slavery.
The high rates are also a way of affecting the growth of our nations economy and it causes me to question the (globalist) big banks real motive.
motives.
Many good people have been trapped in a lifetime of debt due to 18%+ interest rate on credit cards. It’s easy to criticize people who are caught in this trap.
President Trump, you are a good man for trying to help those less fortunate. At 10% people have a fighting chance to throw off the debt chains.
At higher interest rates the balance can easily double in less than 4 years.
This is true. All it takes is one of life’s emergencies to cause one to not be able to pay off their card at the end of the month. You make the minimum payment and then carry over the rest. It then starts to snow ball, next thing you know you are a debt slave. I’ve been there, done that and learned the hard way to keep that temptation out of my finances.
Well, I think it’s more like a pressure campaign. The banks raised their rates so high it’s highway robbery. My credit score is in the stratosphere, and my banks do not reward me for that. I remind myself that it’s my choice to use credit cards for convenience and that I shouldn’t. Even a year of 10% rates would be helpful, but #whatever.
I have a really bad credit score because I have no debt, yet I keep getting credit card offers for zero percent interest for two years. They are trying to draw me into their debt slavery but I won’t fall for it.
I’m not wealthy, I’m a blue collar guy that lives within my means and have found ways to enjoy living life without having to go into debt to do so.
If you live with in your means then there is nothing wrong with 1 CC as long as you never spend beyond 40% of your CC limit and pay it off when the bill comes due.
We have no debt as well, same as our kids but we use our CC’s to pay bills and in return, receive flyer miles or cash back but we always pay them off.
We utilize the benefit and still maintain high credit scores.
This is the way.
Exactly, set up through bill pay, my Daughter pays her rent and some utilities on her CC, pays it off when the bill comes but receives free money in cash back programs.
My Brother-in-law pays his V and MC off with his American Express card and then pays that off, he flys everywhere for free, including first class.
Each CC works differently but it helps to keep your credit score up while you utilize the benefits.
You are also giving data which they utilize to create future debt traps (JMO.)
That’s exactly right. We have accrued millions of points over the years simply by using our CC then paying it off. You’d be a fool not to play that game.
We did a two-week trip to Hawaii last year, stayed at the Ritz, did all of the activities – didn’t cost us a thing.
Both ways are absolutely correct. It depends only upon one’s comfort level.
We have never paid interest on a Credit Card. ( we grew up in a home with only just enough money) and our fear of economic security will always be there…in the back of our mind.
We have two cards, one for points at a major grocery store..the other useful when we travel from Canada to the U.S.A. or overseas.
Investment debt, usually good..consumer debt only in an emergency IMO.
Cheers!
Yeah, agree.
I’ve had this idea too recently.
I’ve been thinking about what it is that I’d like to ‘earn’ just in paying the regular bills this way.
Some people run their entire lives this way, groceries and all.
They then get quite a bit of whatever reward they wanted… why not I figure.
Agreed it is a trap. If you use credit cards as a convenience tool to pay for things (bills reoccurring payments etc.) and you pay on time you will never feel the wrath of the card companies. Miss a payment by a day (USPS is losing checks now all the time) you are nailed with $35.00 late fee and a new interest rate of $30% Ye Haw!!
It is impossible to live without a credit card in today’s world.
Think about this all the money they make on the fees and jacked up interest. Think every transaction the card companies get 2.5 to 3% fee from the store that offers credit cards. Do you think everyone is paying for the 3%? Yep!!
So in some cases the banks are making 33% on credit cards.
Bankers love their money.
1 Timothy 6:10 NIV
For the love of money is a root of all kinds of evil. Some people, eager for money, have wandered from the faith and pierced themselves with many griefs.
I use cash back cards and get a good bit back, it helps.
About, once a year I forget to pay on time, boom there goes a lot of my savings.
Dave Ramsey says use debit cards only. I like the credit card for better fraud protection and conflict resolution.
I finally got confident enough in my balances double my limits to direct pay them all. one for my business and four employees. One more business card exclusively for online service payments and purchases and the same two card setups for the household 5% back for.amazon for business adds up fast.
Funny thing is I carried alot of 0 interest balances to get to this point. That is a risky game. I don’t recommend it so much can go wrong. BUT if your disciplined and lucky it works.
I wonder why there is a flag on your post. I thought I accidentally did that so I tried to undo it to no avail.
I had this same issue.
I’m not sure how much we’re supposed to bother caring about what our credit score is if we never intend to borrow money, but I’ve learned the hard way that life doesn’t go as planned most of the time.
I got a cc with a $500 limit only, my choice.
I buy something on it every once and a while and pay it off at the end of the month.
This is all you have to do and it sends your credit score right up there.
I learned that it wasn’t how much I spent, it was just that I was playing the game.
I don’t intend to borrow money, but who knows, I figured to do this is no big deal and I wound up with a high score very fast.
I always paid my cc balance in full for decades. My bank farmed out their cc business to another bank. Early on the new bank wrote me a letter saying my credit score went down from being high to a lower level. The reason they gave was that I am not using my cc enough. I have to be told when and how to spend my money?
I’m sure it would have to be done by the congress. The credit card companies would probably restrict availability of credit then, which would be a good thing in stopping people who don’t take financial responsibility seriously.
Visa and Mastercard grew into monopolies thanks to a Joseph Biden of Delaware. They happily gave the location of everyone on J6. One cannot even have a girlfriend on the side. Credit cards steal 3% of each transaction and never miss charging each one, much better than our voting legislation. They are robbers. Since COVID I use mostly cash. People that would balk at large bills now love to accept $100 bills.
The Democrats will side with Visa and Mastercard for they want US to be less free. Our President is just getting ahead of the affordability crisis the Democrats created. Good politics.
If your credit score is 835 or so, this will not affect you since you are already doing everything right.
Like paying cards off each month.
When you say “…doing everything right”, do you mean doing everything the money lenders want you to do, or doing everything that’s right for you, the individual?
I have no debt.
I live off a blue collar pension and social security.
I pay cash for virtually everything including the last three houses that I bought and a slightly used Corvette.
I am also sure that I have a crappy credit score because I haven’t financed anything since the 1980s.
My rule #1…Don’t piss away your money on crap.
He means paying off your card in full,
so you don’t pay interest.
and yes it’s true,
you don’t get a high credit score,
if you don’t have debt to pay off.
Beautifully said! I live the same way and drive a 20 year old car.
My business cannot run with out credit cards i have field people and cars that need servicing.
It is set up on autopay so it is essentially a debit card.
I get points for the business so it’s basically 2 percent off everything.
My business has no debt I have no debt I own my home and all my vehicles . I am 70, it took me that long to get here and I am happy and have decided to never die.
You will have your available balance go up ypu won’t use it but it will be there driving your score to 837 lol
I would be concerned that this would encourage running up personal debt. President Trump is much smarter than I am, so hopefully he knows much more than I do, but I don’t like the idea. We need to be debt free.
My concern is how do we reign in Congress? Those sorry, lying, cheating thieves have ruined Social Security and every other program that involves their oversight of the spending. And now, I have learned they are changing the name of our Social Security to “Federal Benefit Program”. As a friend of mine just posted, Social Security is not optional, they have TAKEN my money out of every penny I ever earned and they’ve spent the program dry with their “give-aways” to buy votes. We should all be up in arms and trying to take the power of the purse from the politicians:
“The Social Security check is now (or soon will be) referred to as a “Federal Benefit Payment.” This isn’t a benefit. It is our money! My contributions were made for 40 years on every salary I received. Not only did we all contribute to Social Security but our employers did too. It totaled 15.3% of our income before taxes.
If you averaged $30K per year over your working life, that’s close to $180,000 invested in Social Security.
If you calculate the future value of your monthly investment in social security ($375/month, including both you and your employers’ contributions) at a meager 1% interest rate compounded monthly, after 40 years of working you’d have more than $1.3 million saved! This is your personal investment.
Upon retirement, if you took out only 3% per year, you’d receive $39,318 per year, or $3,277 per month. That’s almost three times more than today’s average Social Security benefit of $1,230 per month, according to the Social Security Administration. And your retirement fund would last more than 33 years (until you’re 98 if you retire at age 65)!
I can only imagine how much better most average-income people could live in retirement if our government had just invested our money in low-risk interest-earning accounts.
Instead, the folks in Washington pulled off a bigger “Ponzi scheme” than Bernie Madoff ever did. They took our money and used it elsewhere.
They forgot (oh yes, they knew) that it was OUR money they were taking. They didn’t have a referendum to ask us if we wanted to lend the money to them. And they didn’t pay interest on the debt they assumed. And recently they’ve told us that the money won’t support us for very much longer.
But is it our fault they misused our investments? And now, to add insult to injury, they’re calling it a “benefit”, as if we never worked to earn every penny of it.
Just because they borrowed the money doesn’t mean that our investments were a charity!
Let’s take a stand. We have earned our right to Social Security and Medicare. Demand that our legislators bring some sense into our government.
Find a way to keep Social Security and Medicare going for the sake of that 92% of our population who need it.
Then, call it what it is: Our Earned Retirement Income.
99% of people won’t Copy and Paste this to their timelines. Will you? I am forwarding it because it touches a nerve in me, and I hope it will in you.
Please keep passing it on until everyone in our country. It’s important.”
How about 10% on prior balances. No giving people free reign that use them for anything but emergencies!
Here’s how price controls lead to socialism
https://www.businessinsider.com/how-price-controls-lead-to-socialism-2016-1
By Ludwig von Mises, Mises Institute
Jan 19, 2016, 12:17 PM MT
“The power to decide these matters has devolved upon the government. This is no longer capitalism; it is all-round planning by the government, it is socialism.”
Exactly. I am a no on this proposal.
This is socialism on steroids, and an attempt at vote buying.
Congress could enact such price control legislation, but it would be a further example of the hypocrisy of congressional spending and borrowing.
The US may be getting too big for its pants this week. Some restraint is in order.
The Fed was socialism, contracted to a banking trust. We are already in a Soviet style Planned Economy my entire life. Unfortunately the plan is only benefiting the banks. We are paying for socialism but not getting what we paid for.
From an old 4chan post on twitter ( the link to the original is no longer there )
“There will be no “collapse” the way some of these people think of it. It’s not going to be like the movie “Dawn of the Dead” or whatever where one day suddenly shit hits the fan and prices skyrocket and everyone begins to riot and the SS comes marching down the street to kill everyone. There will be no “happening”. It’s far more insidious than that. Read the poem “The Hollow Men” by TS ELiot and you’ll understand. You’ll just notice that every day simple things will become a little more expensive. Everyone’s homes and apartments will start to get smaller. your work hours will get longer, but your pay will decrease. You’ll see family and friends less, and find that in time you care less about them. Every day you’ll find yourself lowering your standards for everything: work, food, relationships, etc. Job security will no longer exist as a concept. You’ll notice houses and apartments shrinking. People will start hanging on clothing longer and longer. Less people will get married, even less will have children. People will engross themselves in technological distractions and fantasy while never truly experiencing the real world. Whatever dream people used to have about what their lives were going to be will become for them a distant memory. The only thing left for them will be the reality of their debt and their poverty. And every minute of every day they will be told: “You are stupid, ugly and weak, but together we are free, prosperous and safe. That is the collapse. The reduction of the American man into a feudal serf, incapable of feeling love or hate, incapable of seeing the pitiful nature of his situation for what it is or recognizing his own self worth.”
As of January 10, 2026, many elements feel eerily on track:
US household debt hit $18.59 trillion in Q3 2025 (latest full data), with early 2026 reports showing continued record highs ($18–20+ trillion range). Credit card delinquencies remain elevated, especially among lower/middle-income groups.
Marriage rates continue declining (projected 5.6–5.8 per 1,000 in 2025–2026).
Fertility rate at historic lows (1.6 births per woman in 2024, with slight 2025 uptick but still sub-replacement).
Fewer people marry, fewer have children; delayed childbearing dominates. Home sizes, family time, job security, and real purchasing power erode slowly for the bottom/middle — while asset owners (stocks, housing) see gains.
Endless screens, fantasy leagues, streaming, social media — the modern equivalent of Eliot’s “whispering” hollow men. Official narratives push “sustainable growth,” “resilience,” and “prosperity” while inequality widens.
Not with a bang, but a whimper.
Exactly. A world where one’s morality must be left at home every day when one leaves to go to work. (Partly why organized morality cosplay has become so attractive – especially for the underemployed.). Which oligarchs/entities are paying for our current edition?
Not just morality but identity must be denied, left at home until something goes wrong and the owners create an identity for you that absolves them as you are dragged off to prison.
This is all true, we can see it everywhere- that it’s spot on.
When I was young, we had a crime called “usury.” Credit card companies have been doing that now for decades. There should be a hard limit on the interest rates of all types of [consumer …] loans. And, “title pawn” and other loan sharks should be banned outright.
Yes, you’re entitled to make a profit lending money. But not that much.
I was going to sa the same thing Mike. When was oung there were usuary laws.
Used to only pay cash. Then decided to game the system i pay for everytng with credit card. Everything. Even the electric bill. Pay off the balance each month. Enjoy the significant reward points I get for gift cards. I get paid to use credit. Win-win.
I do the same thing.
My card gives me a cash back for everything I buy and I pay it off every month.
That works up until the Postal Service loses your check to pay off the bill.
That is supposing USPS honestly lost it.
I heard anecdotes about particular postal distribution centers where things like that happen, routinely. Fraudsters have figured out how to adulterate checks. Ditto physical cash.
My sister recently had a check stolen from her mailbox modified and deposited into the persons account.
I have had two checks in the last 3 months lost by the USPS.
If I was someone that believed conspiracy theories I would think that someone wants us to move to a cashless society.
Who writes checks anymore? I pay electronically and never miss a payment.
USPS is being murdered intentionally. Our owners wish to track every aspect of our lives digitally. When we want OUR records they are unavailable but when THEY want our records it’s amazing what they can come up with.
My first thought was 1973, Nixon, and “price controls”.
usury laws are not price control.
When has imposing price controls ever been effective or supported by principle?
Under Maduro, in Venezuela ?
I agree in principle; to me the downside is credit will become more scarce. But, I have to ask, would’t it be better to do with out credit than to be trapped in high interest revolving credit.
I realize most people here don’t rollover there credit card debt. It’s the people who are struggling financially who suffer and will be helped by this proposal.
Agree price controls in general are not good, but this is different imo.
Tons of people who were financially responsible eventually were overrun by the Biden inflation and had to use CC’s to survive. Stuff happens. Medical bills, legal fees through no fault of your own, home and car repairs and other things can happen to the best of us. Some folk’s safety nets had to be used, now that’s run out and CC’s were the only way to survive until Trump was sworn in. Capping the rates (and it MUST be retroactive, not just new purchases) is the best way to fix this. It allows these people to work their way back out of the black hole of credit debt. It needs to be longer though as 1 year won’t get it done. Let’s do this to get people back on track, then they can return to proper credit usage & pay off the charges in full every month. This has to happen or there won’t be a strong economy.
Agree Maxx,
And maybe our educational system could pitch in and have more classeds bon financial literacy.
Drill the students on how the power of compounding is the 8th wonder of the world for asset owners while at the same time the road to debt slavery for those who hold it, if not properly managed.
MAXX…I agree!!! Lack of opportunity to earn income during covid…ongoing expenses, outrageous inflation that drove up the cost of everything, fuel, food, rent, utilities, insurance and finally the taxes and property taxes led responsible people to use those cards to pay the bills.
They are now struggling to pay off the debt…lowering the 33% to 10% will help that happen.
How President Trump makes that happen will be another adventure, but i believe he will get it done!!!!
The Bible speaks of usury and states that it is only acceptable to do to foreigners never to your own people. Historically there really was debt slavery but they also had Jubilee years when debt slaves were freed. Since all banks are globalists(?) everyone on the planet is a foreigner. Our government has gotten the Bible backwards for so long giving everything to foreigners and murdering their own people financially. For years I couldn’t understand until I realized they have all gone global way before I recognized it.
If this winds up anything like the covid related health insurance subsidies that recently expired, I say: no.
To the extent that the credit cards are issued by large US banks, and many of them are, those banks are regulated by the US government, in particular the Fed and the FDIC. The Fed can pretty much dictate anything they want to US banks including capital levels and many many other things as we saw during the financial crisis in 2008 and 2009. President Trump does not in my opinion have the right to dictate bank credit card interest rates, but it would not take much for the Fed and the FDIC to pass a 10% cap.
Prior to the 1978 Marquette Decision of the Supremes, caps were set by states, ranging from 10-18%.
I say screw the banks and finance companies if they can’t make money at this rate.
No store should be allowed to sell eggs for more than $1.00 / dozen for the next year.
Buy some chickens and try feeding them for $1/egg in production, then you’ll understand
S.381 – 10 Percent Credit Card Interest Rate Cap Acthttps://www.congress.gov/bill/119th-congress/senate-bill/381
H.R.1944 – 10 Percent Credit Card Interest Rate Cap Acthttps://www.congress.gov/bill/119th-congress/house-bill/1944
My two cents:
Article I, Section 7, Clause 2:
Every Bill which shall have passed the House of Representatives and the Senate, shall, before it become a Law, be presented to the President of the United States; If he approve he shall sign it, but if not he shall return it, with his Objections to that House in which it shall have originated, who shall enter the Objections at large on their Journal, and proceed to reconsider it. If after such Reconsideration two thirds of that House shall agree to pass the Bill, it shall be sent, together with the Objections, to the other House, by which it shall likewise be reconsidered, and if approved by two thirds of that House, it shall become a Law. But in all such Cases the Votes of both Houses shall be determined by yeas and Nays, and the Names of the Persons voting for and against the Bill shall be entered on the Journal of each House respectively. If any Bill shall not be returned by the President within ten Days (Sundays excepted) after it shall have been presented to him, the Same shall be a Law, in like Manner as if he had signed it, unless the Congress by their Adjournment prevent its Return, in which Case it shall not be a Law.
https://constitution.congress.gov/browse/essay/artI-S7-C2-2/ALDE_00013645/
Midterms are coming.
Politicians on both sides of the aisle (“UNIPARTY”) are playing the voters once again, in order to get reelected.
They put forth legislation with no real intention of following through.
They will not properly “reconsider”, as DEMANDED (“SHALL…”).
Nor will they override a veto.
A bill like this should gain near unanimous support in both houses of Congress.
If one contacts their local representatives , the bills sponsors, or co-sponsors, in relation to a bill, BEFORE THE ELCTIONS, they will be treated to a self-congratulatory speech.
But if (WHEN) it fails, AFTER THE ELECTIONS, one will be told by local representatives, if they are not the bills sponsor, to contact the bills sponsors.
The bills sponsors will tell one to contact ones local representatives, as they are not YOUR representative.
Nobody wants to hear from you. Until the next election cycle
At some point, one will be told that they will take it up again in the “next session”, and that they are “NOT IN SESSION” at this time.
(PRO TIP: Congress is NEVER “NOT IN SESSION”. They hold “PRO-FORMA” sessions; essentially, they “gravel in” and then they “gravel out”)
https://www.congress.gov/crs-product/R42977
If a bill has “near unanimous support”, that would constitute a “veto proof majority”.
It would be very difficult to explain to their constituents how such a bill failed to become law.
They will use this trick on the voters DURING AN ELECTION CYCLE, as many times as they can get away with it.
President Trump is calling their bluff. by forcing their hand, BEFORE THE MIDTERMS.
This would likely require 1) congressional legislation and 2) twisting the arms of the McConnel/Thune republicans who are likely to sell out for money.
Typical trumpism. With everything going on, some special voice whispers and he clamps onto their pet idea.
Yeah, that guy has no idea how to get things done, you nailed that one right there on the ol’ head. S/off
I’m with Sundance on this one. How? This is an issue that really does not affect me and hopefully never will. I only use my credit card for purchases to collect points. I do not carry a balance over from month to month on my credit card. I exchange the points for restaurant and gas convince store cards when I know my husband and I are going to travel. I have no sympathy for people who utilize credit cards to live a life of keeping up with the Jones causing them financial hardship.
Immediate Impact on Credit Availability
Credit card issuers rely on interest income to offset the risk of lending without collateral. A government-mandated rate cap below market levels would reduce profitability, especially for higher-risk borrowers.
As a result, banks would likely ration credit by tightening approval standards.
This shift would effectively exclude financially vulnerable populations from the formal banking system, contrary to the policy’s intended goal.
30% is NOT market level. We must return to market level at 10%. Banks made boat loads of cash before the rates went sky high. Also. Trump could prevent banks from retaliation, not allowing the things you fear. Banks need to be brought back to reality. There’s lots of ways for Trump to screw over the banks if they don’t play ball.
I’m taking this as an opportunity from Sundance to think about a better payment system.
Banks get several percent (negotiated with each business) just for clearing the payment. For those cc customers who don’t pay off the charges and keep a balance, the 25-30% interest (in addition to the merchant charge) is continuous. This is arguably usurious.
For those customers who pay off their charges each month, there is approximately a month of “credit” (paid for by the merchant charge, itself based on the merchant’s customer payment history). At, say, a 3.5% charge to the merchant for a month of customer ‘credit’ x 12 => an over 40% effective “interest” rate per year. Minus the processing cost which has greatly decreased. It is mostly all electronic.
A more detailed and accurate report from the FED is at https://www.federalreserve.gov/econres/notes/feds-notes/credit-card-profitability-20220909.html The gigantic interest rates and late fees represent almost all of the bank profit, which comes from the debt slaves.
The most responsible approach IMHO is to effectively have the merchant be the ‘borrower” for the processing cost, and the bank proccessing ‘profit’ The merchant effectively extends credit for the amount of time until the merchant gets paid by the bank for the custome charges. This should ideally approximate the time until a non-interest-paying customer pays off the entire credit card bill every month so the credit time extended to the cc customer equals the credit time extended to the bank by the merchant (until the merchant gets paid by the bank). The processing fee charged to the merchant should approximate the processing cost plus processing profit plus bad debt charge.
The interest charges should be subject to reasonable usury law. 10% looks like a reasonable number.
Having been involved in negotiating and managing one of my previous employers’ credit card contracts some 10 years ago, I would like to add several more ways the banks produce profit from credit card activity. There is usually a base fee per transaction plus a percentage of the transaction charged to the merchant. Those fees to the merchant vary according to the type of card. For example, a credit card that gives away points costs the merchant more than a card without any of the frills. The greater the frills are, the more the transaction costs the merchant.
Also the credit card companies (Mastercard, VISA, American Express, Discover, Diners if they still exist) can increase those rates at any time. So essentially you have 4 or 5 companies but the 3 big ones who control rates over all of the merchants who agree to take cards……and what merchant is going to say no to any credit card purchases – this is for the entire globe. So there is little competition among those 4 or 5 companies.
So banks get fees from merchants, which merchants have to figure into costs per item, and they get interest from users who carry balances. And they don’t give away those points without costs plus expenses being generously covered by fees. So they market to credit card holders by advertising those frills to pull in more credit card holders; the merchants are pretty much forced to accept credit cards in order to stay in business, and the merchant’s costs get added to per item prices.
So there is limited competition among providers for a service that is widely used due to marketing and societal norms.
And who is in control of all of it including the psychologically targeted marketing? The same globalists that are mentioned on this site daily.
I am not sure our government cards figure into this system if they do.
This is a very good post. Your points are well taken.
I think that anyone saying Trump is using price controls is right. I would ask if the banks are regulated then there is an acceptance that government places controls on the bank. But does our government control our banks?
We were told they are too big fail. They are a cartel
The banks are the problem. There is no competition.
Trump is doing this to call them out.
Recent Congressional review:
https://www.congress.gov/crs_external_products/IF/PDF/IF12861/IF12861.4.pdf
I remember when credit cards were capped at 18% in my state of Wisconsin. There were also finance companies back then that lent to high credit risks. Anyone else remember Thorp Finance and AT&T Finance?
If you have a poor credit history you will pay higher interest just like if you have a bad driving record you will pay higher auto insurance
The way to have low rates is pay your bills promptly, never late, use credit wisely and not very often. Always remember to save.
If I was going to change anything about credit cards it is how the compound interest. They compound interest daily unlike auto loans and home loans. You have to understand that or you will never pay off your credit cards.
Maybe the government should limit credit cards to compounding monthly if they want to reform credit cards?
Thorp FinanceThorp Finance Corporation was a prominent consumer loan company in the 1980s but faced significant legal issues that led to its decline. In 1984, the company was charged with deceptive insurance sales practices in Wisconsin, resulting in a settlement that could amount to $12 million in refunds to consumers.
AT&T FinanceAT&T Finance was part of the broader AT&T Corporation, which has undergone transformative changes since the breakup of the original Bell System in 1982. AT&T reshaped itself in different phases
Transparency on interest compounding on student loans is necessary, especially when ownership changes hands. Been a long time for me but there was NEVER any accountability, no supervisor to speak with, nothing written to refer to – absolutely disgusting and seemingly criminal. I would ask them specifically if they were compounding by the minute? By the hour? By the week? Never could get an answer.
There were a whole bunch of consumer finance companies like that, including Household, Beneficial, Associates First Capital and many others which made a business out of one lending to high risk consumers at high interest rates. Many of them have gone out of business over the years, but many of them were also purchased by large banks and continue to operate as divisions of those banks.
This was just his opening offer. I’m confident he has some sort of a plan.
He isn’t decreeing; he’s setting the table of expectation. He expects congress to act. He expects to sign a law. He expects the banks to challenge the law in the courts leading to the SCOTUS. I expect this series of events.
First, congress actually gets the job done. Why? Because the banks lawyers are sure that the courts will come to their rescue. Also, it gives the illusion of cooperation; a “see, we understand” moment.
Second, POTUS Trump signs the law. He gets a domestic win that a large majority of Americans can easily understand. Congress wins. President Trump wins. The banks get a temporary image makeover.
Third, after a honeymoon period, one or two smaller banks file a lawsuit in federal court. Their claim is that the new law interferes with existing contracts that bank card holders are bound to. A friendly federal court, likely in the district of New York, grants a motion for a TRO in that district.
Finally, the administration moves to resolve this issue quickly. This order in NYC affects almost all of banking around the nation, therefore, no relief is in place until it is resolved. It quickly finds its way to the SCOTUS where CJ John Roberts finds a way, a la Obamacare, to strike down the law. It costs him nothing. It costs the Court nothing. They are immune from consequences. And in the end, the banks get what they want.
It’s a guess, anyway.
Is having a credit card a right or a privilege’s ?
The main objective for everyone should be is to not have a carry over balance on your credit card. Meaning pay off your “balance” that is shown on the monthly closing date and any pending charges that haven’t been posted by closing date. It’s really quite simple.
…… Even a caveman can do it.
Right..
This is what most sane people try to do.
Imagine this scenario, through no fault of your own you just lost your job. Jobs are scarce and the Biden economy is in the toilet. Illegal aliens are competing fiercely for the day labor market. You find some work, but it’s not enough.
You and your wife decide to let the credit card payment, which you normally pay of each month, rollover. Your wife was pregnant with your 3rd child before you were laid off.
We should be grateful to God we are not in this situation. If we are in it, then thank God for POTUS Trump for making this proposal and pray for God’s guidance on how to get out.
I would say there’s not a way for President Trump to enact this..possibly the Fed with interest rate caps.
Saving as much money as you can is the key. I do have an Am Ex that I pay off each month…car rental, streaming TV, etc.
One extra way of saving money is keeping a paper register and rounding up. If it’s a receipt for $21.29, it is written in the register as $22. I have been doing this for 20 years and have saved thousands of dollars, which has come in handy for those unforeseens like a trip to the hospital, a husband that hands you NO receipts (😂). I call it “My Buffer.” Money discussions go like this between me and my husband: Him: “How much is in our checking?”
Me: “Blah blah blah (not the true figure) 🤣”. Him: “Okay, how much is in there with the buffer?” Me: “Rolls eyes, forks over the true number.” 😂.
Given the utter lack of self control with respect to spending suffered by many in the US, what exactly does 10% interest accomplish?
It theoretically reduces the the MONTHLY MINIMUM payments by reducing the Interest Penalty on over due balances. However, in the minds of habitual spenders, this actually increases the amount of money (principle) actually available to spend as the concept of self control does not exist in their psyche …. spending and debt would NOT decrease.
I speak from the on-going experience of a daughter who never met a dollar she did not want to spend … a constant battle we still wage in support of her husband.
For people who are in credit card debt, it offers them a possible life line. Granted some people are not trying to get out of debt, but many are. For those that are it gives them a chance to avoid bankruptcy, which is good for no one.
We complain about the banks making so much money off of interest and fees, yet a great many have their hopes set on a retirement fund that makes it’s money off of bank earnings and values. We throw a fit and demand that companies replace executives who don’t make us money, yet complain when they do the things that make the money we demand.
It’s really pretty hypocritical. If we want the root cause, look in the mirror.
Here is the thing:
We’re only allowed to have so much debt based upon our income.
People are maxed out and that then shuts them down, they can’t then continue to participate in the economy..
That debt means they can’t buy a home, they can’t get the better car, it’s keeping them stuck at the bottom of the ladder.
AND most of this credit card debt that people are carrying is for all the living expenses that come up and the money isn’t there.
Most people don’t want debt and credit cards- they have no choice.
Donald Trump can’t get his great big beautiful economy running hot if we don’t have any money.
Also, being in debt is a real risk to your personal situation, it’s not good.
So this should help damn near everyone in the country to get them finally paid off.
This is fantastic out of the box thinking by a President that is actually trying to help us all.
I’m going to speak my opinion so try not to dig into this too deep please.
Donald Trump now President Trump gets stuff done and we all know he’s a little egocentric, he’s always been this way. I’ve accepted him for who he is, heck, I voted for the guy 3 times. As the President, he faces a very serious economic situation regarding our current situation thanks to our brain dead politicians who have certainly mastered the art of politics but lack the capacity to understand economics.
I believe Trump, like most of us do, is to think out loud to everyone around us to bounce ideas off each other and get feed back on whether our ides will work or not.
President Trump, being the Egocentric he is, must always project confidence so that we don’t give up hope as I’m sure families can understand this, especially with our own kids.
Why would President Trump want to cap interest rates at 10% on CC’s for 1 year and not longer to what Sundance has shown Congress wanting to do for 5 years? What is the benefit of 1 year versus 5 years and who actually benefits?
I would agree with a prior comment on here that this would hinder the credit availability to anyone needing credit but I ask my self, will the CC companies get subsidized because of this lose?
Congress, as far as I’ve always understood, are the only ones who can write the laws and only the President can sign those laws or veto them. EO’s can and do get erased and replaced.
I guess what I’m try to convey is, this is President Trump’s time in office and he, I believe, must present himself in the highest of manners during his short time in office. I’m not saying it’s a bad or good thing, it just is.
The BBB passed into law regarding all those tax benefits, expire at the end of President Trumps term but it never gets mentioned.
I can Honestly say, I would not want to be the President having to deal with rival Countries, like China or Russia who are becoming stronger everyday while trying to pull our country out from the devastation left behind from all our past administrations mistakes and certainly, corruption.
So I’ll can say is enjoy what we have with President Trump doing the best he can in a very difficult time in our country’s history because we are still a powerful country and still the worlds reserve currency while President Trump is writing his own legacy. I certainly don’t blame him for that, I would to, I guess, if I were dealing with complete and utter Morons from the past.
He can call all he wants, appreciate it, but it’s not in his bag of tools.
Per Jeff Childers today there are 2 bills filed by both sides to do that last year, was sat on now may move to vote.
The Chief Executive cannot set interest rates or bank policy. While I applauded Trump for this statement I hold zero hope that our ruling class will relent of keeping us a free range tax slaves.
We need national usury laws. I hate to say it but this should be a Federal issue. States have demonstrated that “states rights” that impinge on national freedoms have abused the standard of states rights and therefore need to be corrected.
Additionally the notion that Banks are floating that “Lower creditworthy persons won’t have access to credit” and “would be forced (huh?) to go to loan sharks is utter poppycock. Since when does irresponsible financial behavior by a few create burdens on the majority of responsible credit users? Since Marx – that’s when.
The wholesale looting of the producing class must end. And end now. And while I’m at it “End the IRS!”
President Trump is a savvy enough to twist arms of the bankers.
The only exception for higher rates would be for previous bankruptcy.
Banking is a pretty straightforward construct. Banks create lending capacity through deposits and other debt instruments on their balance sheet, with a fairly consistent cost of funds, based on the maturity of their debt and cost of carry of their debt. But with base risk free interest rates in the 4 – 7 % range, and a lot of float and deposits at near zero rates, their cost of funds to support their credit card portfolio is in the middle single digits. The margin they need between what they earn on the credit they grant and their cost of funds doesn’t need to be much more than a few hundred basis points (2 – 2.5%)to make a reasonable profit.
If they are charging 20 – 30% to consumers on their credit card balances, their margins are in effect usury. Now they will argue that it is a risk premium that they collect due to consumer default. Two points on that – 1) with an excess interest margin of close to 20%, that means that they expect default rates of 20% on their average outstanding balance during the year. If that is the case, then the issue is that they are too permissive in the granting of credit cards. 2) People with good credit, who don’t have much default risk, are paying those inflated interest rates and subsidizing the deadbeats. In short, credit cards are a real racket.
limit credit use.
use cash so they cant track and sell your spending habitsa and create a psychological profile for you.
Trump always employs our most important weapon: economics. If he said this then there has to be some leverage the federal government has on the CC companies. But I think you are correct, Sundance, I think there has to congressional law work done.
How can this be accomplished? There have been price controls before. There was rationing of certain items during WWII. By what authority were these things done? You couldn’t buy gold for many years.
Carrot and Big Stick
1.Here’s the carrot I am appointing a new fed chair your cost of borrowing goes down.
2.Young people live paycheck to paycheck always have but more so now. They spend based on their available income and credit and minimum payment the minimum payment goes down they spend more. So a year from now greater debt at higher rates.
BIG Stick
1. I.will be.controling.the fed be nice.
2. Every banking and credit agency or enforcement arm is under my leadership don’t piss me off
3. I don’t like banks want me to prove it?
What will cc companies to to stop loses
1. they could freeze credit but they would lose 3 percent point of sale income.
2. Refuse to comply and Trump asks them if they heard of Bud Light?
3. Take the hit turn it in to all marketing opportunity and try to get the credit worthy to top up their newly expanded balance
Pay off your debt ASAP, and try to live within your means. I tell people that Trump isn’t perfect but he’s the best we got.
We need cheaper goods, not cheaper debt.
Several good comments here on his owning the narrative either way it goes. Of course, he can’t do anything with an EO. Just pressure. Perhaps high level scrutiny on banks dotting i’s crossing t’s.
But for simple terms, the rule of 7s for investing can apply here, but in reverse. Rule of 7. At 10% per year, something doubles in 7 years. So, extrapolation, 20-30% on credit card…..doubles in 2-3 years i guess. They cant get ahead (note, I pay mine off every month). So, 10% hopefully would help. Hopefully, folks would pay down and not build more up.
Anti Ursury laws were normal before the first great inflation (Carter
) There were many states that capped interest at about 10%.
Arkansas was one and if you had great credit you could get a card from some Arkansas banks. WSJ published lists and phone numbers of low interest banks.
After Carter this mostly disappeared.
One of the issues was the interest charged in the period after Carter was not passed to depositors or investors
Cards were charging 35% but deposits got 0.3% (a third of a percent) and stockholders were not getting dividends.
This is how things stand even now .
It is well past time for states to step up and stop the banks from gouging the consumer
I believe President Trump’s statement is a “shot across the bow” of the South Dakota financial industry. Their sock puppet, John Thune, has become a major obstacle to his agenda.
This is very important for the lower middle class… huge help!
As your local loan shark, I am complying with Mr. Trump’s 10% interest rate cap.
Your loan interest rate is now 110%!
/s