President Trump calls for a one-year, 10% cap on credit card interest rates, threatening severe consequences for non-compliance. Despite bipartisan support for similar proposals in the past, current response is uncertain. Financial institutions oppose the cap, arguing it would harm American families and small businesses (1-5).

The U.S. leads the world in credit card debt, with an average APR ranging from 20.18% to 27.39%. A 10% cap could save consumers significant money, but experts warn of unintended consequences, such as reduced credit availability and increased fees. Other developed nations have implemented interest rate caps with varying success (6-12).

A 10% cap on credit card interest rates could save consumers $100 billion annually, but may also lead to cuts in rewards for customers with lower credit scores. Taking personal action to reduce credit card debt is still the most effective strategy, as the timeline for implementing the proposed cap remains uncertain (13-14). Two popular debt repayment methods are the avalanche method, paying off high-interest debt first, and the snowball method, starting with the smallest debt. Other options include transferring debt to a 0% interest credit card and asking creditors for lower rates. Debt consolidation loans can also help lower interest rates. Ramsey Solutions emphasizes budgeting and cutting credit card use to pay off debt faster.

Lending Tree suggests transferring debt to a 0% interest credit card, which can offer 0% introductory periods on purchases and balance transfers for 12-15 months. Asking credit card companies for lower rates also proved successful for 83% of those who tried, resulting in an average 6.7% rate cut. Debt consolidation loans can also be beneficial in lowering interest rates.

In light of rising credit card interest rates, various sources have proposed measures to cap rates at 10%. While some advocate for the debt avalanche or snowball methods, others support transferring debt to 0% interest cards or negotiating lower rates. Ultimately, reducing unnecessary spending and sticking to a budget can help individuals pay off credit card debt faster.

Read more at Yahoo Finance: Trump demands credit card companies cap interest rates at 10%, but you may not want to wait on Washington to get relief