President Donald Trump proposed capping credit card interest rates at 10% for one year, starting January 20th, a move that has ignited debate about its potential impact on Americans grappling with escalating debt. The proposal comes as millions face increasing financial strain, exemplified by individuals like Selena Cooper, 26, a former paralegal who lost her job following a government shutdown.

Cooper, residing in Columbia, South Carolina, saw her credit card debt swell to $6,000 after missing payments in October. She said that Capital One and American Express subsequently raised her interest rates, with Capital One's rate doubling to 16% and American Express increasing from 10% to 18%. Cooper, now relying on her photography business for income, stated that while Trump's proposed cap "would help a little bit, it's still not going to get me out of debt."

Credit card debt has become a significant concern for many Americans, particularly those facing job loss or income instability. The current average credit card interest rate hovers around 20%, according to recent data from Bankrate, making it difficult for consumers to pay down balances. A 10% cap, as proposed by Trump, would significantly reduce the cost of carrying a balance, potentially freeing up funds for other essential expenses.

However, some financial analysts caution that such a cap could have unintended consequences. Lower interest rates might lead to reduced credit availability, particularly for individuals with lower credit scores, potentially limiting their access to emergency funds. Banks could also tighten lending standards, making it more difficult for consumers to obtain credit cards in the first place.

Furthermore, the proposal raises questions about the role of government intervention in the financial markets. Critics argue that capping interest rates could distort the market and discourage lenders from offering credit to higher-risk borrowers. Others contend that such intervention is necessary to protect consumers from predatory lending practices and alleviate the burden of excessive debt.

The Consumer Financial Protection Bureau (CFPB) has been actively monitoring credit card practices and addressing concerns about unfair or deceptive practices. The agency has the authority to regulate credit card companies and enforce consumer protection laws. It is unclear how Trump's proposal would interact with existing CFPB regulations.

As of now, the proposal remains in its early stages, and it is uncertain whether it will gain traction in Congress. The potential economic and social implications of a credit card interest rate cap are complex and require careful consideration. Further analysis and debate are expected as policymakers weigh the potential benefits and drawbacks of such a measure.