Could President Trump Credit Card Interest Rate Cap Work In UK?

Earlier this week, President Donald Trump announced that he wanted interest rates on US credits to be capped at 10% pa for 12 months from 20/01/26.

Trump is concerned that the USA’s spiralling debt problem is a major contributor to suppressing the US economy and we tend to agree.  It is not just the people though; it is also governments that continue borrow.  There may be legal hurdles to jump but our impression of the President that this will come to pass.   As you would expect, shares in US financials fell away.  For example, if American Express is charging 18% on older credit card and then it is capped at 10%, meaning profits are nearly halved, you can guess what happens to the share price.

This set us thinking about the UK.  Headlines from the BBC and financial news groups this week have been:

• “Government to give cash payouts to people in financial crisis.”
• “Second charge lending continues growth trajectory with 27% annual rise.”
• “Brokers call for financial education.”
• “Majority of brokers have seen rise in adverse credit.”

According to both Google AI and MoneySupermarket.com the average APR on UK credits is currently around 35-36% as at late 2025/early 2026. Rates have climbed steadily, with averages increasing from around 24-27% in mid-2022 to their current levels.

Should the UK government follow Trump’s lead?

Comment

Credit cards are a ‘cash cow’ for bankers and other financial institutions.  Enticing people in with 0% deals and a free M&S or Amazon voucher, encouraging us to spend (the writer of this article gets offers all the time to spend on his card given his balance is £zero).

People often live beyond their means due to social pressure.  Younger adults lack financial education when they leave school/college/university to understand how dangerous credit can be and all time we are bombarded with offers to spend,, spend, spend.

Do you really think bankers will ‘come willingly to the table’?  We think not.  They would fight any cap on interest rates.  Credit is a necessary for people to start their own business, grow business and develop the economy.  Personal, credit cards are a must to keep us safe with purchases, particularly the fraud protection, so we get that this type of debt that has no security for the bank and offers all the protection to the consumer should be more expensive, but charging 36% when base rates are currently 3.75% pa and expected to fall to 3.5% pa, means a 1000% mark up by the average card provider.  This is tantamount to organised and legalised theft or extorsion and successive governments have ignore this for years given the biggest taxpayers in the UK are banks.

Education would appear to be the only route to wean us off or make us more cautious when using credit cards.