Sen. Bernie Sanders (I-VT) is calling out President Donald Trump for failing to deliver on his campaign pledge to cap credit card interest rates at 10%, accusing big banks of exploiting working Americans while raking in record profits.
During the campaign, Trump promised to limit credit card rates to 10%. But in a post on X this week, Sanders said, “Instead, JP Morgan & Wells Fargo made $20 billion in profits in the past 3 months charging credit card interest rates as high as 30%. Unacceptable.”
Bipartisan Push to Cap Rates at 10%
Earlier this year, Sanders teamed up with Sen. Josh Hawley (R-MO) to introduce bipartisan legislation that would cap credit card interest rates at 10% for five years.
The proposal mirrors Trump’s original campaign pledge, which he framed as a way to bring immediate financial relief to struggling families.
“During the campaign, President Trump pledged to cap credit card interest rates at ten percent,” Sanders said in a February press release.
“Today, I am proud to be introducing bipartisan legislation with Senator Hawley to do just that. When large financial institutions charge over 25 percent interest on credit cards, they are not engaged in the business of making credit available. They are engaged in extortion and loan sharking.”
Hawley echoed that view, saying, “Working Americans are drowning in record credit card debt while the biggest credit card issuers get richer and richer by hiking their interest rates to the moon. It’s not just wrong, it’s exploitative. And it needs to end.”
The senators pointed to the sharp disconnect between banks’ borrowing costs and what they charge consumers.
The Forbes report found that the average credit card interest rate is 28.6%, while banks can borrow from the Federal Reserve at less than 4.5%.
Record Debt and Soaring Profits
According to data cited in the Sanders-Hawley announcement, Americans now hold a record $1.17 trillion in credit card debt. The average household with outstanding balances owes more than $21,000, and delinquency rates are the highest since 2011.
Sanders and Hawley argue that the imbalance between consumer rates and bank profits has become unsustainable.
Between 2019 and 2024, Visa earned $67.5 billion in profits, Mastercard $44.3 billion, and American Express $33.8 billion. Their top executives collected more than $370 million in total compensation during that period.
“We cannot continue to allow big banks to make huge profits ripping off the American people,” Sanders said.
“This legislation will provide working families struggling to pay their bills with desperately needed financial relief.”
Research Backs the Cap
A Vanderbilt University study published in September estimated that Trump’s proposed 10% cap could save Americans roughly $100 billion a year in credit card interest.
Researchers concluded that even with such limits, banks could still operate profitably, though they might need to scale back some rewards programs for high-risk borrowers.
The study found that banks could remain profitable even with a 15% cap while continuing to offer perks like travel points and lounge access.
Since many reward programs are funded through merchant fees, most consumers would likely see little change in benefits.
Mixed Reactions and Political Hurdles
The American Bankers Association (ABA) has opposed similar legislation in the past. In a statement, ABA President and CEO Rob Nichols said the bill would limit consumer choice and reduce access to credit, particularly for people with lower credit scores. He warned it could push borrowers toward “less-regulated, more risky alternatives including payday lenders and loan sharks.”
While public support for rate caps remains strong, it has slipped slightly in recent years.
A LendingTree survey found that 77% of Americans favor a cap on credit card interest, down from 84% in 2019. The banking industry, however, remains firmly opposed.
Financial groups argue that a strict cap would restrict access to credit, particularly for consumers with lower credit scores, and could push them toward costlier products like payday loans.
“There’s no evidence that APR caps make consumers better off or save them money,” said Lindsey Johnson, president and CEO of the Consumer Bankers Association.
Policy experts also note that the Sanders-Hawley proposal, if passed, would not apply retroactively.
Borrowers already carrying high-interest balances would not see their rates fall. Still, analysts say the effort signals growing bipartisan concern about rising household debt and predatory lending practices.
A Long Road Ahead
Despite bipartisan sponsorship, the bill faces a tough path in Congress. Its prospects may hinge on inflation trends and whether Trump reaffirms his support for the 10% cap while in office.
Jaret Seiberg, a policy analyst for TD Cowen, said, “If pricing stays stable, it’s going to be much tougher to advance this kind of legislation.”
For Sanders, however, the issue remains simple. With Americans buried under record credit card debt and paying rates near 30%, he says Wall Street has turned basic lending into profiteering.
As he put it, “When large financial institutions charge over 25 percent interest on credit cards, they are engaged in extortion and loan sharking.”
IMAGE CREDIT: “Bernie Sanders” by Jackson Lanier, via Wikimedia Commons. Licensed under CC BY-SA 4.0. Image adjusted for layout.