Trump's Bold Plan: Limit Credit Card Interest Rates to 10% – But Could This Move Lead To Dangerous 'Price Controls' Critics Fear?

Donald Trump made waves during a Long Island campaign stop by suggesting a cap on credit card interest rates, a proposal that quickly drew sharp criticism. 

Speaking to a lively crowd of around 16,000 at the Nassau Coliseum, the former president announced a plan to limit interest rates to 10%. According to Federal Reserve data, this is a dramatic cut from the current average of 21.5%. 

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"We're going to cap it at around 10%. We can't let them make 25 and 30%," Trump declared to thunderous applause. "While working Americans catch up, we're going to put a temporary cap on credit card interest rates."

The move is part of Trump's broader economic pitch, but critics are raising alarms, arguing it could have unintended consequences. Industry insiders have drawn comparisons between Trump's proposal and what they label “price controls” akin to measures suggested by Democrats.

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"Trump just proposed his version of price controls," remarked euro Pacific Asset Management chief economist Peter Schiff. Schiff warned that such a cap could spell disaster for the credit card industry. 

"It would destroy the industry and millions of Americans would lose their credit cards," he added. "There are heavy losses in credit cards from people who don't pay, so they need the high interest rates to offset that. There's also a lot of fraud."

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Despite Trump's confident claims, no credit card interest rates have ever dipped to 10% in recorded data, which dates back to 1994. Rates surged starting in early 2022, largely due to inflation during the COVID-19 pandemic. Critics worry that capping rates could backfire, hurting the people Trump says he's trying to help. 

An insider from the Consumer Bankers Association didn't mince words, telling The Post, "Government-imposed price controls on credit card interest rates would harm all cardholders, especially the lowest-income Americans." According to the source, consumers with lower incomes or poor credit scores could be denied access to credit entirely.

The American Bankers Association, another key player in the financial industry, echoed these concerns. "We've opposed similar interest rate cap proposals in the past," said a spokesperson for the group, referencing efforts from figures like Bernie Sanders and Alexandria Ocasio-Cortez to limit rates to 15%. 

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"They would result in the loss of credit for the consumers who need it the most. Instead, these consumers would be forced to turn to less-regulated, more risky alternatives like payday lenders and loan sharks."

Trump's proposed rate cap also mirrors recent political debates about price controls. Last month, Trump fiercely criticized Vice President Kamala Harris for proposing a crackdown on price gouging in the food industry. At the time, he labeled her plan "communist" and accused her of being a "Marxist."

Trump's camp remained tight-lipped about how the credit card rate cap would be implemented despite The Post’s requests for clarification. However, the 45th president has continued to make bold promises. 

Before the Long Island rally, Trump pledged to cut car insurance rates, claiming on social media, "Your Automobile Insurance is up 73% – VOTE FOR TRUMP, I'LL CUT THAT NUMBER IN HALF!"

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