Donald Trump is betting on a “10% solution” to solve America’s credit card debt crisis. In a surprise announcement on Truth Social, the former president revealed a plan to cap credit card interest rates at 10% for one year, starting January 20. Trump framed the decision as a necessary intervention to stop companies from charging “extortionate” rates of up to 30%, which he claimed had festered under the previous administration.
The proposal addresses a massive economic problem: the $1.17 trillion mountain of credit card debt held by U.S. consumers. High interest rates make it difficult for families to pay down their balances, leading to a cycle of debt that drags on the economy. Trump’s plan offers a blunt but potentially effective way to break that cycle, promising immediate financial relief to millions of borrowers.
However, the banking industry warns that the 10% figure is economically unviable. Major financial groups issued a statement arguing that the cap would force them to restrict credit availability. They explained that interest rates act as a price for risk; if the price is capped too low, banks cannot afford to take the risk of lending to borrowers with lower credit scores. This could lead to a situation where credit cards become a luxury item available only to the wealthy.
Political reaction has been sharp and divided. Senator Bernie Sanders, who had just criticized Trump for inaction, saw his own policy adopted by the White House. Senator Josh Hawley cheered the move as a “fantastic idea.” But Senator Elizabeth Warren called it a “joke,” arguing that Trump is making empty promises without the legal power to fulfill them.
Investor Bill Ackman also weighed in, warning that the cap could lead to mass card cancellations. He predicted that banks would move quickly to protect their balance sheets, leaving subprime borrowers without access to credit. As the January 20 deadline approaches, the debate over the 10% solution is just beginning.