President Trump aims to lower credit card interest rates to 10% for a year, pressuring companies to comply by Jan. 20. The proposal mirrors past efforts to cap rates, but experts warn of potential long-term effects on cardholders and the economy.

Currently, the average credit card interest rate for accounts with assessed interest is 22.30%, significantly higher than rates in the past. Credit card margins have also increased, contributing to higher interest rates for consumers.

While a 10% rate cap could offer significant savings for households with credit card debt, experts caution about the potential negative consequences on credit access, rewards programs, and overall earnings. Some believe a rate cap may lead to reduced credit availability and limited rewards options.

Consumers with high-interest credit card debt may benefit from a temporary rate cap, but experts warn of potential risks, including reduced credit access and earnings from rewards programs. Banks may tighten lending standards, making it harder for Americans to qualify for credit cards.

To lower interest on credit card debt, consumers with solid credit scores can consider using a balance transfer credit card with a 0% introductory APR. This strategy can help pay down existing balances without accruing additional interest, potentially more beneficial than a temporary rate cap.

Read more at Yahoo Finance: What Trump’s 10% cap on interest rates would mean for credit cardholders