Credit Cards, Delaware, and the Politics of a 10% Interest Cap
Credit cards rarely make headlines until something breaks. But lately, they’ve become impossible to ignore.
In January 2026, President Donald Trump proposed a one-year cap on credit card interest rates at 10%. The idea landed with immediate traction among consumers. With average credit card rates hovering above 20% — and many retail cards charging close to 30% — the proposal struck a nerve.
It sounded simple. It sounded fair. And it highlighted just how uncomfortable the current system has become for millions of households.
A System Built for Convenience — and Profit
Credit cards are the most widely used form of unsecured borrowing in the United States. Total outstanding balances now exceed $1 trillion, spread across a relatively small group of dominant issuers.
The largest providers of general-purpose credit card debt include JPMorgan Chase, Citigroup, Capital One, Bank of America, and American Express. Together, they control the majority of bank-issued card balances and earn billions annually from interest and fees.
Retail credit cards — the store-branded cards offered at department stores and online merchants — are largely issued by firms like Synchrony Financial, Bread Financial, and Citi Retail Services. These cards are easier to qualify for, often come with discounts or rewards at the point of sale, and almost always carry higher interest rates than traditional bank cards.
That distinction matters, because retail cardholders tend to be lower-income and more vulnerable to rising rates.
Who Pays the Most Interest
Not all borrowers are treated equally.
The consumers paying the highest interest rates fall into the subprime category — generally defined as borrowers with credit scores below 620. These cardholders routinely face APRs between 25% and 30%, sometimes higher once penalty rates are applied.
Subprime borrowers are also more likely to hold multiple retail cards, each with its own balance and minimum payment. Even when they remain current, interest compounds quickly, turning short-term borrowing into long-term debt.
Prime borrowers, by contrast, often pay rates in the high teens or low twenties and have access to balance transfers, promotional offers, and larger credit limits. The system rewards creditworthiness aggressively — and penalizes risk just as aggressively.
Why the Data Looks Better Than It Feels
Official delinquency statistics often suggest stability. Headline numbers show credit card delinquency rates around 3%, implying that most consumers are managing their obligations.
But those averages hide important details.
Delinquency is heavily concentrated among subprime borrowers, younger consumers, and lower-income households. In these groups, serious delinquency — balances 90 days or more past due — is several times higher than the national average.
Consumers under financial stress often prioritize credit card payments over other bills because access to revolving credit feels essential. That behavior suppresses delinquency in the short term, even as balances grow and interest accumulates.
In other words, many consumers are staying current — but just barely.
Delaware’s Quiet Role
One reason credit card interest rates remain so high has little to do with borrowers and everything to do with geography.
Much of the U.S. credit card industry is based in Delaware, a state that deliberately reshaped its banking laws decades ago to attract financial institutions. Under federal rules, banks are allowed to “export” the interest rates permitted in their home state to customers nationwide.
Delaware’s permissive framework effectively allows issuers to bypass stricter usury limits elsewhere, enabling high APRs across all 50 states. This structure helped transform credit cards into one of the most profitable segments of consumer finance.
The result is a national system shaped by a single state’s regulatory choices.
The Trump Proposal and Its Limits
Against this backdrop, Trump’s proposed 10% interest rate cap gained attention quickly. For consumers accustomed to rates double or triple that level, the idea felt like overdue relief.
But the mechanics are complicated.
A president cannot unilaterally impose a nationwide interest rate cap. Any such change would require Congressional approval, and similar efforts have repeatedly stalled under industry opposition. Banks argue that hard caps would force tighter underwriting standards, reducing access to credit for riskier borrowers.
Critics counter that reduced access may be preferable to debt traps that never meaningfully amortize. Both sides have a point.
There’s also the risk of unintended consequences. If traditional credit tightens, borrowers may turn to alternatives like buy-now-pay-later services or non-bank lenders, which often carry opaque costs of their own.
Why the Proposal Resonates Anyway
Even if unlikely to pass in its current form, the proposal speaks to something real.
Credit card interest rates are at multi-decade highs. Minimum payments barely reduce balances. Households are carrying more revolving debt later into life. And financial stress is increasingly concentrated among younger consumers who entered adulthood during a period of unusually easy credit.
The anger isn’t ideological. It’s experiential.
A family carrying $7,000 in credit card debt at a 22% interest rate can spend decades paying it down without aggressive intervention. That reality makes a 10% cap sound less like populism and more like common sense — even if implementation is fraught.
What Comes Next
Delinquency tends to lag economic stress by six to twelve months. That means today’s relatively calm averages may not reflect tomorrow’s outcomes. Many economists see the next year or two as a key test for household balance sheets.
Whether or not Congress acts, the pressure on the system is building. High rates, concentrated risk, and regulatory inertia are colliding with consumer fatigue.
The Bottom Line
Credit cards remain an essential financial tool. They provide flexibility, liquidity, and convenience. But they also extract a growing cost — one that is unevenly distributed and increasingly hard to ignore.
The Trump proposal may not become law, but it has already succeeded in reframing the conversation. Credit card interest, long treated as background noise, is now front and center.
And once consumers start paying attention to how debt is priced, issued, and protected — especially by a system rooted in Delaware — it becomes much harder to pretend the status quo is sustainable.
Evan R. Guido, Senior Wealth Advisor, is the Founder of Aksala Wealth Advisors LLC, a 2026 Forbes Best in State Wealth Advisor, a 2018 Forbes Top Next-Gen Advisors award recipient. Evan heads a team of financial strategists for clients who consider themselves the “Millionaire Next Door.” He can be reached at 941-500-5122 Aksala.com eguido@aksalawealth.com 6260 Lake Osprey Dr. Lakewood Ranch, FL 34240. Securities offered through Cetera Wealth Services, LLC member FINRA/SIPC. Advisory Services offered through Cetera Investment Advisers LLC, a registered investment adviser. Cetera is under separate ownership from any other named entity. The views and opinions presented in this article are those of Evan R. Guido and not of Cetera or its subsidiaries. These opinions are based on Evan’s observations and research and are not intended to predict or depict performance of any investment. These views are subject to change based on subsequent developments. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. These views should not be construed as a recommendation to buy or sell any securities and purely for education and entertainment. Past performance does not guarantee future results. The Top Next Gen list includes 250 rising advisors who help manage over $490 billion in client assets. Each advisor was nominated by their firm, then vetted and ranked by SHOOK Research. The rankings, developed by SHOOK Research, are based on an algorithm of qualitative criterion, mostly gained through telephone and in-person due diligence interviews, and quantitative data. Those advisors who are considered have a minimum of four years' experience and the algorithm weighs factors like revenue trends, assets under management, compliance records, industry experience and those that encompass the highest standards of best practices. The Forbes ranking of Best-In-State Wealth Advisors, developed by SHOOK Research, is based on an algorithm of qualitative data, rating thousands of wealth advisors with a minimum of seven years' experience and weighing factors like revenue trends, assets under management, compliance records, industry experience, and best practices learned through telephone and in-person interviews. Portfolio performance is not a criteria due to varying client objectives and lack of audited data. Neither Forbes nor SHOOK receive a fee in exchange for rankings. Listings in these publications and/or awards are not guarantees of future investment success. These recognitions should not be construed as endorsements of the advisor by any clients. No compensation was provided directly or indirectly by the recipient for participation or in connection with obtaining or using these third-party ratings or award.