President Donald Trump's administration is nearing a deadline of January 20 for credit card companies to comply with his demand to cap interest rates at 10%, leaving consumer groups, politicians, and bankers uncertain about the White House's plans and the seriousness of the proposal. With just days remaining, the White House has yet to provide specific details regarding potential consequences for companies that fail to lower their rates.

White House Press Secretary Karoline Leavitt stated on Friday that the president expects credit card companies to adhere to his demand. "I don't have a specific consequence to outline for you but certainly this is an expectation and frankly a demand that the president has made," she said.

The potential implementation of a 10% interest rate cap raises several complex economic and technological questions. One key consideration involves how artificial intelligence (AI) algorithms currently used by credit card companies for risk assessment and fraud detection would be affected. These algorithms, often trained on vast datasets of consumer spending habits and repayment histories, help determine individual credit limits and interest rates. A mandated rate cap could necessitate a recalibration of these AI models, potentially impacting their accuracy and effectiveness.

From an AI perspective, the challenge lies in retraining these models to operate within the new constraints. This could involve adjusting the algorithms to prioritize different factors in creditworthiness assessment or developing new AI-powered tools to identify and mitigate potential risks associated with the rate cap. The success of such adjustments would depend on the availability of relevant data and the ability of AI developers to adapt their models to the changed economic landscape.

A study conducted during Trump's 2024 presidential campaign estimated that Americans would save approximately $100 billion in interest annually if credit card rates were capped at 10%. The same research indicated that while the credit card industry would experience a significant financial impact, it would remain profitable, although credit card rewards and other perks might be reduced or eliminated.

The potential societal implications of this policy are multifaceted. While lower interest rates could benefit consumers, particularly those with lower incomes or high credit card debt, the reduction or elimination of rewards programs could disproportionately affect consumers who rely on these benefits. Furthermore, the long-term effects on credit availability and the overall health of the credit card industry remain uncertain.

The use of AI in financial services is increasingly prevalent, and policies like the proposed interest rate cap highlight the need for careful consideration of the ethical and economic implications of these technologies. As AI continues to shape the financial landscape, policymakers, industry leaders, and AI developers must work together to ensure that these technologies are used responsibly and in a way that benefits society as a whole.

Currently, the White House has not clarified its next steps or provided further guidance to credit card companies. The industry and related stakeholders are awaiting further communication from the administration as the January 20 deadline approaches.