Tariffs may be his trademark, but U.S. President Donald Trump's latest catchword is all about "affordability."

Reviving a campaign pledge, Trump recently said he wants a one-year, 10% cap on credit card interest rates, a move that could save Americans tens of billions of dollars, but which drew immediate opposition from an industry that has been in his corner.

Trump was not clear in his social media post Friday night whether a cap might take effect through executive action or by legislation, though one Republican senator said he had spoken with the president and would work on a bill with the president's "full support." Trump said he hoped it would be in place Jan. 20, one year after he took office.

The remarks came just days after the U.S. president floated a ban on major investors from buying single-family homes. Both appear to be a part of his "affordability" push, which comes in a year of the midterm elections, where Republicans aim to preserve 2024 gains, which led them to secure control of the upper chamber – the Senate – and to have a majority in the House.

But critics question whether these initiatives, indeed, deliver as Trump risks alienating corporate America.

Banking industry fires back

The U.S. banking industry is warning that Trump's plans to lower credit card costs would reduce credit availability and hurt consumers and businesses. Banks argue that such a plan would most hurt poor people at a time of economic concern by curtailing or eliminating credit lines, driving them to high-cost alternatives like payday loans or pawnshops.

"We will no longer let the American Public be ripped off by Credit Card Companies that are charging Interest Rates of 20 to 30%," Trump wrote on his Truth Social platform.

Five associations representing U.S. banks responded that they shared the president's goal of helping Americans access "more affordable credit."

"At the same time, evidence shows that a 10% interest rate cap would reduce credit availability and be devastating for millions of American families and small business owners who rely on and value their credit cards," the associations said in a joint statement late Friday.

"If enacted, this cap would only drive consumers toward less regulated, more costly alternatives," it said.

The statement was issued by the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum and Independent Community Bankers of America.

Credit cards are the primary source of consumer credit in the U.S. Costs and outstanding balances have soared in recent years as people increasingly rely on them to maintain spending, even for basic necessities.

Researchers who studied Trump's campaign pledge after it was first announced found that Americans would save roughly $100 billion in annual interest if credit card rates were capped at 10%. The same researchers found that while the credit card industry would take a major hit, it would still be profitable, although credit card rewards and other perks might be scaled back.

About 195 million people in the U.S. had credit cards in 2024 and assessed $160 billion in interest charges, the Consumer Financial Protection Bureau says. Americans are now carrying more credit card debt than ever, to the tune of about $1.23 trillion, according to figures from the New York Federal Reserve for the third quarter last year.

Further, Americans are paying, on average, between 19.65% and 21.5% in interest on credit cards according to the Federal Reserve (Fed) and other industry tracking sources. That has come down in the past year as the central bank lowered benchmark rates, but it is near its highs since federal regulators began tracking credit card rates in the mid-1990s, according to a report by The Associated Press (AP).

Bank lobbyists have long argued that lowering interest rates on their credit card products would require the banks to lend less to high-risk borrowers.

When Congress enacted a cap on the fees that stores pay large banks when customers use debit cards, banks responded by removing all rewards and perks from those cards. Debit card rewards have only recently trickled back into consumers' hands. For example, United Airlines now has a debit card that gives miles with purchases.

"A 10% credit card interest cap would save Americans $100 billion a year without causing massive account closures, as banks claim. That's because the few large banks that dominate the credit card market are making absolutely massive profits on customers at all income levels," said Brian Shearer, director of competition and regulatory policy at the Vanderbilt Policy Accelerator, who wrote the research on the industry's impact of Trump's proposal last year.

The White House did not respond to AP questions about how the president seeks to cap the rate or whether he has spoken with credit card companies about the idea.

Housing measures

Meanwhile, Trump said on Thursday he is ordering his representatives to buy $200 billion in mortgage bonds to bring down housing costs and has called on barring large investors from buying more single-family homes.

"For a very long time, buying and owning a home was considered the pinnacle of the American Dream," he said in a post on Truth Social, while pinning blame on the Joe Biden administration and Democrats in Congress for high inflation, which made that American Dream "increasingly out of reach for far too many people, especially younger Americans."

"It is for that reason, and much more, that I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it. People live in homes, not corporations," he added.

The president said that he will expand on the proposal and outline additional housing and affordability measures during a speech at the World Economic Forum (WEF) in Davos, scheduled for Jan. 19-23.

All recent pledges come as Trump has been facing growing voter frustration over the issue of affordability, despite efforts to dismiss it as a "hoax" by Democrats, while sparking Republican fears they could be punished in the 2026 midterm elections.

While there has not been a widespread surge in inflation since Trump rolled out sweeping new tariffs on various imports from U.S. trading partners, companies have reported higher business costs, and analysts note a divergence in the economy.

Higher-income households may be doing well, but those with lower incomes tend to be struggling with costs.

Within the housing sector, the median sales price of previously owned homes has been climbing in recent years, according to the National Association of Realtors (NAR).

NAR data showed that the median cost for existing homes was $409,200 in November, up 1.2% from a year ago.

At the same time, Trump's public approval has mostly deteriorated since his inauguration, as Americans worry about the economy.

In December, just one in three U.S. adults approved of Trump's handling of the ‌economy, his lowest rating on the matter last year, according to a Reuters/Ipsos poll. Many are also unsatisfied with the polarizing issue of immigration and recent attacks on Venezuela.