President Donald Trump is moving fast to get the American economy turned around. The inflation rate is slowing, the manufacturing sector in the United States is expanding, and trillions of dollars in private capital are pouring back into the American economy. The jobs numbers for American workers are improving as well, and the stock market is reaching new peaks. There are even predictions that the economy could grow at a rate of 5 percent.
By rolling back the progressive policies that constrained growth over the past four years, Trump has unleashed a long-overdue economic rebound.
That’s why it’s puzzling, and concerning, that when it comes to the consumer credit market — the most important market for the nation’s economic health — the administration is now flirting with the very kind of socialistic price controls that have historically smothered economic growth.
The economy of the United States is driven by consumer spending. Personal consumption has long accounted for roughly two-thirds of gross domestic product.
In the third quarter of 2025, the rate of economic growth was an astonishing 4.3 percent, with consumer spending responsible for more than half of this growth. Much of that spending is financed through consumer credit. In 2024 alone, credit cards facilitated roughly $3.6 trillion in purchases, or about 12 percent of GDP.
Yet, recently, the administration announced a proposal to cap credit card interest rates at 10 percent.
Spending drives growth. To keep the Trump economic revival going, we should encourage policies that allow even more money to change hands every day.
Trump may think that capping credit card interest rates will do this because it will make it easier to afford loans. However, it is likely that most of today’s lenders will cease lending to much of the economy when it is implemented.
Unlike other loans, like mortgages and car loans, credit cards offer an unsecured line of credit. If a consumer can’t repay, the situation is different than a car or home loan, where the items bought with the borrowed money can be repossessed and sold to repay the debt. Credit card interest rates are higher than other forms of credit for this reason.
A universal 10 percent cap would force lenders to price all borrowers the same, regardless of risk, spreading the credit risk across all borrowers. This would mean tighter credit for Americans who are rebuilding their financial lives or going through rough patches — because banks will have no choice but to increase fees or interest on hardworking families who pay their bills.
When these hundreds of thousands of families stop spending money because the credit card company drops them, it is going to severely hurt the economic growth path that America is on, playing right into the gloomy predictions of the mainstream media and radical left. Because less loans means less market activity and a less healthy economy.
The consequences would be especially severe for working families.
Federal Reserve data show that roughly 37 percent of adults cannot cover a $400 emergency expense with cash. Of those who could pay for the expense in some other way, the most common means was by using a credit card and having a balance. Only approximately 55 percent of adults have savings sufficient to pay for three months of expenses.
If they can’t get a loan to cover their expenses, not only will their opinion of the economy turn, so will their opinion of the Republican Party. This is the last thing the Trump administration would want before the midterm elections.
It’s appropriate for Trump to decry the overreach of regulators and failures of policy that held back economic growth in recent years. However, it’s a mistake to adopt a simplistic approach of setting an across-the-board credit card rate cap.
Instead, Trump’s administration should continue encouraging economic growth and spending through deregulation and pro-growth policies.
These approaches have delivered results, and the administration should stick with them.
Lynn Westmoreland served in the U.S. Congress from 2005 to 2017. He served on the Committee on Financial Services and its Subcommittee on Financial Institutions and Consumer Credit.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller News Foundation.
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