President Donald Trump proposed capping credit card interest rates at 10% for one year starting January 20, a move that has brought renewed attention to the growing burden of credit card debt for many Americans. The proposal comes as individuals like Selena Cooper, 26, struggle with mounting debt and rising interest rates.

Cooper, a former paralegal who lost her job after the government shutdown, saw her credit card debt balloon to $6,000 across three cards. She first missed payments in October, and recently, Capital One and American Express notified her of interest rate increases due to late payments. Her Capital One rate doubled to 16%, while her American Express rate jumped to 18%, she said.

The average credit card interest rate currently hovers around 20%, according to recent data from Bankrate. This high rate, combined with economic instability, can quickly trap individuals in a cycle of debt. Trump's proposed cap aims to alleviate some of this pressure, but its potential impact is debated.

"It would help a little bit, but it's still not going to get me out of debt," Cooper said, highlighting the limitations of a temporary cap for those with significant existing debt. She is now relying on income from her photography business to manage her finances.

Economists are divided on the effectiveness of such a cap. Supporters argue it could provide immediate relief to struggling families and stimulate the economy by freeing up disposable income. Critics, however, warn that it could lead to unintended consequences, such as reduced credit availability, particularly for those with lower credit scores. Banks may become more selective in issuing credit cards, potentially pushing vulnerable individuals towards less regulated and potentially predatory lending options.

The proposal also raises questions about government intervention in the free market. Some argue that setting interest rate caps could distort the market and discourage lending, while others contend that such intervention is necessary to protect consumers from predatory lending practices.

The Consumer Financial Protection Bureau (CFPB) has been studying the impact of high interest rates on consumers and is expected to release a report on the topic in the coming months. This report could provide further insights into the potential effects of interest rate caps and inform future policy decisions.

Currently, it is unclear whether Trump's proposal will gain traction in Congress. Similar proposals have faced opposition in the past due to concerns about market interference and potential negative impacts on the credit industry. The debate surrounding this proposal underscores the complex challenges of addressing consumer debt and the need for comprehensive solutions that consider both individual circumstances and the broader economic landscape.