I am an independent-minded Democrat and a consumer-protection lawyer. Donald Trump and I do not agree on much. But during the 2024 campaign he looked at the credit card industry, called the interest rates abusive, and floated capping them at around 10 percent. And you know what? On that narrow point, he was right.
I say that on purpose, because the credit card industry has survived for decades on one trick: convincing you that whether it's ripping you off is a political question. It isn't. When a progressive consumer lawyer from Minneapolis and a Republican president land in the same place, it should tell you that the people getting fleeced here are not Democrats or Republicans. They're just customers. This is one of those rare fights where the line isn't left versus right. It's everyone versus the industry.
The three-part machine
Here is how the credit card business actually works when it works against you.
Part one: the rate. Credit card interest rates routinely run north of 25 percent — rates that would be flatly illegal as payday loans in Minnesota, where we cap small consumer loans at levels far below that. The industry gets away with it partly through federal preemption tricks that let issuers "export" the loosest state's rules to everyone. Trump's instinct to cap the rate wasn't radical; it was the same instinct behind the Military Lending Act's 36 percent cap that already protects our troops, and behind Minnesota's own recent move to cap larger consumer loans at 36 percent. The only question is why the protection stops at the servicemember's door.
Part two: the fees. Late fees, over-limit fees, the penalty-rate jump that doubles your interest after one slip. The 2009 Credit CARD Act reined in the worst of these — and, as I documented earlier in this series, its substantive fee limits saved consumers on the order of $12 billion a year, while its disclosure rules saved a rounding error by comparison. The lesson was clear: rules that actually limit what companies can charge work; rules that just make them disclose what they charge barely move the needle. The industry learned that lesson too, and has been trying to claw the limits back ever since.
Part three — the one that hides the other two: the arbitration clause. Buried in every major credit card agreement is a forced-arbitration clause and a class-action waiver. That clause is what makes parts one and two untouchable. If your card issuer overcharges a million people the same illegal fee, those million people cannot join together to make it stop. Each of them must fight alone, in a private, confidential proceeding, on a claim usually too small to pursue by itself — in front of an arbitrator the industry helped pick. The overcharge isn't a bug the company is racing to fix. It's a business plan, and forced arbitration is what makes the plan safe.
Why the arbitration piece is the keystone
Take a step back and you see the design. The high rate and the junk fee generate the profit. The arbitration clause guarantees that no court, no jury, and no class of angry customers can ever take that profit back. And because arbitration is secret — no public record, no precedent — the pattern never even becomes visible. As I've written elsewhere in this series, that's exactly how a credit card clause you never read can be turned against you, even by a debt collector you never dealt with, using a doctrine called equitable estoppel to drag your claim into the dark.
So when Trump called the rates a scam, he was seeing one part of the machine. The fuller truth is that the rates are a scam and the fine print is the getaway car. You can't fix the first without dealing with the second.
The honest complication
I'll be straight, because that's the brand. A hard federal rate cap has real tradeoffs — set it too low and some higher-risk borrowers may lose access to any legal card at all, the same tradeoff I flagged on payday loans. Reasonable people can argue about the number. And credit itself isn't the enemy; a card is a genuinely useful tool for millions of people. The problem isn't that credit exists. It's that the terms are dictated, the rates are hidden behind preemption games, the fees creep back the moment anyone looks away, and the one tool you'd use to push back — a day in court, with your fellow customers — has been quietly deleted. Fix that, and the market can do the rest.
What we can do
Cap the rate where a state can, and cheer the federal cap. Minnesota already extended a 36 percent ceiling to larger consumer loans. Push that logic as far as state power and federal preemption allow, and support a national cap — from whichever party proposes it. If Trump wants to cap credit card rates at 10 percent, a Minnesota attorney general should hold the door open, not slam it because of who said it.
Restore the courthouse. The rate and the fees are only untouchable because of the arbitration clause. Back the FAIR Act, demand transparency on arbitration outcomes, and use every state lever to stop letting issuers lock the courthouse door.
Keep the CARD Act's real teeth. The substantive fee limits are what saved consumers real money. Defend them from the industry's steady effort to water them back down, and prefer limits over mere disclosure every time.
The credit card industry's greatest achievement was convincing Americans that being fleeced is a partisan issue. It never was. A Democrat consumer lawyer and a Republican president looked at the same rates and reached the same verdict: it's a scam. The difference an attorney general makes is turning that shared verdict into something the fine print can't undo.
First the facts. Then the fix.
Sources
Drawn from David J.S. Madgett's book The Rigged Court (2026) and this series' earlier articles on the fine print and on Minnesota's consumer-loan caps. Donald Trump's 2024 campaign proposal to temporarily cap credit-card interest rates at approximately 10 percent, describing prevailing rates as abusive, was widely reported (e.g., statements at a September 2024 New York campaign event). Credit CARD Act of 2009: the substantive fee-limit savings (on the order of $12 billion/year) versus disclosure savings are from Agarwal et al., 130 Q.J. Econ. 111 (2015), and NBER Working Paper 19484, as cited in this series' fine-print article. Minnesota's consumer-loan caps: Minn. Stat. §§ 47.60 and 47.603 (36 percent APR ceiling on larger consumer small loans; parallel to the federal Military Lending Act's 36 percent Military Annual Percentage Rate). Forced-arbitration and class-waiver mechanics, and the equitable-estoppel/non-signatory doctrine, as detailed in this series' companion arbitration articles and in The Rigged Court.
Trump's rate-cap proposal is characterized as a 2024 campaign-trail statement, not enacted policy. Typical credit-card APRs and the access-vs-protection tradeoff of rate caps are described in general terms. Commentary, not legal advice. Corrections: campaign@madgettformn.com.