Trump Promised a 10% Credit Card Rate Ceiling — What Americans Are Paying Instead

Trump pledged a 10% cap on credit card rates, but Washington has made little progress, and millions of Americans are still sending a sizable share of each payment straight to their banks. Here is what that difference means on a real balance.

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A caller named Katie “can’t afford her credit card payments,” according to a recent post from Dave Ramsey’s X account. The radio host’s answer was a budget, so she can “plan every dollar before the month begins.” His reasoning: “Remember, chaos and disorganization always eat all of your monthly income.”

Ramsey hosts The Ramsey Show and is best known for his debt snowball method. He is correct that Katie needs a budget. But as a full answer, his advice leaves out the figure doing the most harm: her interest rate. A budget shows where money goes, but it does not change how much of each payment the card issuer keeps.

A 21% Card Rate Eats Up Half of Each Payment

Federal Reserve data show the average commercial bank credit card rate at 21.19% in the latest reading, up from 20.94% in the prior update. The next report is due soon.

That is only slightly below the record of 22% set in a prior reading. A few years earlier, the same rate stood near 15%.

That backdrop makes the promise look even bigger. Donald Trump called for a temporary 10% cap and brought up the idea again after taking office. Since then, the White House has stepped back from the proposal, according to a Bloomberg report summarized by PYMNTS. The Senate’s 10% Credit Card Interest Rate Cap Act remains listed as introduced, while the House version has been sent to the Financial Services Committee.

Senator Elizabeth Warren’s account says borrowers lose an extra $368 million in interest every day the cap is not in place. That is her estimate. Banks argue that a cap would force them to reduce credit access for the borrowers who need it most.

Here is what the gap looks like on an example $6,000 balance. At 21.19%, the first month’s interest is about $106. At 10%, it is $50.

On a $200 monthly payment, about 53% of Katie’s first payment would go toward interest at today’s average rate.

Stretch that over the full payoff period, and the difference becomes even clearer. Paying $200 a month at 21.19% would erase the balance in about 43 months and cost roughly $2,621 in interest.

At 10%, the same payment would finish the job in about 35 months and cost about $933. A budget can free up the money, but the rate determines how much of it actually reduces the debt.

Americans Are Paying More Even as Delinquencies Ease

Posts on X recently claimed past-due balances had “surged to 13%” and that “1 in 10 Americans are now in default.” Fed data do not support those claims. The credit card delinquency rate at commercial banks was 2.85% in the latest reading, down from a peak of 3.22% in an earlier period.

Most cardholders are keeping up with their bills, but they are paying more to carry the same balances. Even after the Fed left rates unchanged in late October, its benchmark remains at 4%. Credit card rates are much higher because issuers add risk premiums and profit margins.

Carrying a Balance Is What Changes the Math

If you pay your statement in full every month, your APR matters very little. The Consumer Financial Protection Bureau says people who pay in full do not start paying interest until the grace period ends. For them, a 10% cap would save almost nothing.

If you carry a balance, interest starts immediately on new purchases. In that case, the APR becomes one of the most expensive items in the budget, as the $6,000 example shows.

Ways to Lower Your Rate Without Waiting on Washington

1. List every card by APR. Write down each balance and rate from your latest statements. Paying the highest rate first, known as the avalanche method, usually costs the least in total interest. Ramsey’s snowball method, which begins with the smallest balance, gives up some of those savings in exchange for quicker momentum.
2. Call each issuer and ask about hardship help. Request a lower APR, ask how long it will last, and ask whether the account will be frozen. Then rerun the payoff math using the new rate.
3. Check a balance transfer. A promotional 0% card can pause interest. Be sure to include the transfer fee in your calculation and confirm the rate that applies when the promo period ends.
4. Reach out to a nonprofit credit counselor. A debt management plan can combine your cards into one payment, often at negotiated rates below what you pay now.
5. Then build the budget. Ramsey’s approach works best once each extra dollar is going toward principal instead of interest.

As long as the cap bills remain in committee, the Fed’s next card-rate update is the figure to watch, and your own APR is the one you can actually change.