Bill Ackman backs Trump’s credit card rate cap but warns of risk to subprime borrowers
Billionaire hedge fund manager Bill Ackman has welcomed US President Donald Trump’s plan to cap credit card interest rates at 10%, calling the move “worthy and important,” while warning that an abrupt ceiling could unintentionally shut millions of Americans out of formal credit.
Trump announced plans to impose a one-year cap on credit card interest rates, framing the proposal as a consumer-friendly intervention aimed at easing affordability pressures amid persistently high borrowing costs. Under the plan, credit card companies would no longer be allowed to charge interest rates in the range of 20% to 30% or higher. The cap is set to take effect on January 20, 2026, marking the first anniversary of Trump’s return to the White House.
In a post on X (formerly Twitter), Ackman said he supported the president’s objective of lowering borrowing costs but raised concerns about the potential fallout of a hard cap.
“I think President @realDonaldTrump’s goal of reducing credit card interest rates is a worthy and important one,” Ackman wrote. “My concern about capping rates at 10% is that doing so will inevitably cause millions of Americans to have their cards cancelled as credit card companies lose the ability to adequately price subprime credit risk.”
Ackman warned that restricting lenders’ ability to price higher-risk borrowers could push vulnerable consumers toward informal and illegal lenders. “Consumers denied credit cards will be forced to turn to loan sharks whose rates and terms will be vastly worse for borrowers,” he said, adding that such arrangements often carry extreme financial and personal risks.
While acknowledging that interest rates above 20% are “high,” Ackman argued that the credit card market is already highly competitive and that regulatory reform, rather than price controls, could offer a more sustainable solution. He suggested that encouraging new entrants and technologies could help bring down rates organically without shrinking access to credit.
“I have no investments in the credit card space so I am not the expert,” Ackman noted, “but the best way to bring down rates would be to make it more competitive by making the regulatory regime more conducive to new entrants and new technologies.”
Trump, however, has defended the proposal as a necessary intervention, placing blame on the previous Joe Biden administration for allowing high interest rates to persist. In a post on Truth Social, the president said credit card companies had “festered unimpeded” while charging excessive rates.
“Please be informed that we will no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more,” Trump wrote, punctuating the announcement with a single word: “AFFORDABILITY!”
Ackman closed his remarks by praising Trump’s broader focus on lowering costs, pointing to declining mortgage spreads and rates, which he attributed to the administration’s policies. He said that finding a way to reduce credit card interest rates without cutting off access to credit would have “a very positive impact on the most disadvantaged Americans.”
