The Proposed Credit Card Interest Rate Cap, Explained
A 10% cap on credit card interest has been in the news. Here's exactly what's been proposed, what's actually law today, and what the difference would mean for a real balance.
Short answer: no national cap on credit card interest exists today. In January 2026, President Trump called for a one-year cap of 10%, and a separate bill already in Congress (S.381 and H.R.1944) proposes a 10% cap running through January 2031. Neither has passed. As of now, card issuers can still charge whatever rate your agreement allows, and the current U.S. average sits around 21% to 22%.
What's actually been proposed
Two related but separate things are happening at once, worth keeping straight:
- President Trump's proposal (January 2026): a call for a one-year, 10% cap on credit card interest rates, announced publicly rather than introduced as a specific bill.
- The 10 Percent Credit Card Interest Rate Cap Act (S.381 in the Senate, H.R.1944 in the House): introduced in 2025 by Senators Bernie Sanders and Josh Hawley, this bill would cap credit card APRs at 10% through January 1, 2031. It predates Trump's announcement and has bipartisan sponsorship, but as of this writing it remains stalled in committee and hasn't advanced to a floor vote.
Neither is current law. Any restriction on card interest rates would need to pass Congress to take effect.
Why it hasn't moved
The bill has bipartisan sponsors but faces real resistance. Banking industry groups argue a hard cap could reduce credit availability, particularly for borrowers with lower credit scores, since issuers may respond by tightening approvals or cutting credit lines rather than absorbing lower revenue. Some analysts, including at KBW, have called the odds of the bill actually passing low, and even some Republican leadership has expressed caution about rate controls. Research cited in coverage of the proposal estimates a cap could save consumers roughly $100 billion a year in interest if enacted, which is the case its supporters make.
What your card costs today vs. under a 10% cap
This is not a tool you can use today, since no cap is in effect. It shows what the difference would be if the proposed 10% rate applied to your balance right now.
What actually exists today
No general federal cap applies to credit card interest. The one real, existing federal rate cap is narrower: the Military Lending Act caps the cost of new credit taken out during active duty at a 36% Military Annual Percentage Rate for active-duty servicemembers and their dependents. A separate, older law, the Servicemembers Civil Relief Act, caps interest at 6% specifically on debt taken on before active duty. See our SCRA calculator if either applies to you. Outside of military-specific protections, interest rates are otherwise set by the card issuer and your agreement.
What to actually do while this is unresolved
Waiting on legislation isn't a plan. If your rate feels too high right now, see how to negotiate a lower rate, compare a balance transfer, personal loan, or credit counseling, or run your real numbers with the payoff calculator. This page will be revisited if the legislation moves.
Frequently asked questions
Is there currently a cap on credit card interest rates?
No general federal cap exists today. Two proposals, a bill in Congress and a separate call from President Trump, would create a 10% cap if passed, but neither is law.
Did President Trump's proposal and the Congressional bill happen at the same time?
No. The bill (S.381/H.R.1944) was introduced in 2025 by Senators Sanders and Hawley, before Trump's January 2026 public call for a one-year cap. They are related but separate.
Why hasn't the bill passed?
It remains stalled in committee. It has bipartisan sponsors, but faces resistance from the banking industry and some lawmakers over concerns it could reduce credit availability.
Is the Military Lending Act's 36% cap the same as this proposal?
No. The MLA already exists and caps new credit for active-duty servicemembers at 36%. The proposed cap discussed here would apply to all consumers at 10% and has not been enacted.
Disclaimer. This guide is for educational purposes only and isn't financial advice. Terms vary by card and issuer, so check your cardholder agreement, and consider a qualified financial advisor or a nonprofit credit counselor for help with debt.
Sources: Congress.gov (S.381 bill text and status), CNBC, SoFi, and Senator Whitehouse's office. Checked current as of August 15, 2026; revisit if the legislation's status changes.
About the author
Credit Interest Calculator is part of Ready Utilities, founded by Cedrick Reese, a retired veteran and web developer who enjoys building free, user-friendly online tools that simplify everyday tasks. His journey began in the early 2000s with affiliate marketing and niche site development, which grew into a passion for creating practical digital utilities and calculators.
After retiring, he earned a Computer Systems Technician certificate from UEI College, completed Electro-Mechanical Technologies at Tulsa Welding School, and finished the Carpentry program at Florida State College at Jacksonville. Today he combines his technical background and craftsmanship by building furniture using traditional woodworking methods, gardening, and developing helpful online tools for users worldwide.