President Donald Trump proposed capping credit card interest rates at 10% for one year, starting January 20, a move that has ignited debate about the growing burden of credit card debt on Americans. The proposal comes as millions grapple with increasing financial strain, exemplified by individuals like Selena Cooper, 26, a former paralegal who lost her job after the U.S. government shutdown.

Cooper, who resides in Columbia, South Carolina, saw her credit card debt escalate to $6,000 after missing payments in October. She now relies on income from her photography business. According to Cooper, card issuers Capital One and American Express subsequently raised her interest rates due to late payments. She stated that her Capital One rate doubled to 16%, while her American Express rate increased from 10% to 18%.

Cooper believes the proposed cap "would help a little bit, but it's still not going to get me out of debt."

Credit card debt in the United States has been steadily rising, fueled by factors such as stagnant wages, rising living costs, and easy access to credit. Many Americans rely on credit cards to cover essential expenses or manage unexpected financial emergencies. The average credit card interest rate currently hovers around 20%, according to recent data from Bankrate, making it difficult for consumers to pay down their balances.

Economists are divided on the potential impact of Trump's proposal. Supporters argue that a rate cap could provide immediate relief to struggling borrowers, allowing them to pay down debt faster and avoid falling into deeper financial hardship. Critics, however, caution that such a measure could have unintended consequences, such as reduced credit availability for high-risk borrowers or increased fees for credit card services. Some also argue that a temporary cap does not address the underlying issues driving debt accumulation.

The proposal raises complex questions about the role of government intervention in the financial sector and the balance between consumer protection and market efficiency. It also highlights the need for comprehensive solutions to address the root causes of debt, such as financial literacy programs and policies that promote wage growth and economic opportunity.

The White House has not yet released specific details on how the proposed rate cap would be implemented or enforced. It is likely that the proposal would face legal challenges from the credit card industry, which argues that it infringes on contractual agreements and could disrupt the credit market. The future of the proposal remains uncertain, but it has undoubtedly brought renewed attention to the issue of credit card debt and its impact on American families.