Podcast Summary: Jill on Money with Jill Schlesinger

Episode: Can Trump Cap Credit Card Rates?
Date: January 14, 2026
Host: Jill Schlesinger, CFP®
Guests/Contributors: Mark (Producer/Co-host), CBS Mornings anchors (Nate Burleson, Gayle King, Vladimir Duthiers)

Overview

In this episode, Jill Schlesinger dives into the headline-making proposal from former President Trump to cap credit card interest rates at 10%. The show unpacks whether he has the legal authority to do so, explores the potential impact on everyday Americans, and examines the wider ramifications for credit markets and the economy. The discussion also touches on recent developments at the Federal Reserve, including a Department of Justice investigation into Chairman Powell, highlighting the critical importance of Fed independence.

Key Discussion Points and Insights

1. Can the President Legally Cap Credit Card Rates?

Timestamp: 04:52–05:19

• Legal Authority:

  • Gayle King clarifies, "We're not sure he actually can do this by fiat. It looks like it has to be Congressional action. There have been some bipartisan efforts ... to try to make this happen. They've stalled out. Maybe with the President's push they can get them revived again."
  • Takeaway: The President cannot unilaterally cap credit card rates; it likely requires legislation.

• Current Credit Card Rates:

  • Average credit card interest rate for balances is currently 20%.

2. The Impact of a 10% Cap on Credit Card Interest

Timestamp: 05:20–06:26

• Example Calculation:
  • On a $5,000 credit card balance at 24% interest, a consumer might pay around $100/month in interest.
  • With a 10% cap, interest drops to $41/month, saving about $700/year.
  • Gayle King underscores, "It is unambiguously a great thing for consumers. The question is how long would it last?"
• Policy Duration:
  • Concern raised regarding the effect if the cap only lasts a year—would consumers get out of debt fast enough?

3. Link Between Fed Rates and Credit Card Rates

Timestamp: 06:26–07:03

• Mechanics:
  • Vladimir Duthiers asks if Federal Reserve action will lower card rates.
  • Gayle King replies, "The Federal Reserve controls short-term interest rates and those do translate to credit card interest rates... But when the Fed goes down, say by a quarter of a percentage point, the credit card companies, they don't go down by a quarter of a percentage point exactly, some fraction of that."
  • Lower rates can stimulate growth, but risk boosting inflation.

4. Political and Industry Pushback

Timestamp: 07:03–08:50

• Realistic Prospects of a Cap:
  • Mark: "It's only for a year. So I'm not sure how much ... that's going to move the needle in the long run."
• Industry Concerns:
  • Jill shares statement from Dennis Dollar (National Credit Union Association):
    • "The president cannot set interest rates on a credit card any more than he can set the Fed funds rate."
    • If caps are enforced, "companies will not be able to offer [credit cards] to riskier borrowers and those with lower incomes and lower credit scores. ... You want to drop the rate from 20 to 10, fine, we're not going to be able to offer your ... voters as much credit."
  • Potential for rise in less regulated lending alternatives like ‘buy now, pay later.’

5. Best Practices for Consumers

Timestamp: 08:50–09:13

• Jill: "If you're carrying credit card balances, you know what you have to do. You got to go highest interest to lowest interest."
  • Urges listeners to pay off the highest-rate cards first, regardless of political promises.

6. DOJ Investigation & Federal Reserve Independence

Timestamp: 09:13–13:26

• DOJ Investigation:

  • Powell under investigation for cost overruns on the Fed's building renovation project.
  • Accusation: Lying to Congress about project expenses.

• Powell’s Response:

  • (Mark quoting Powell from a video) “The new threat is not about my testimony ... the threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President. ... This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions or whether instead, monetary policy will be directed by political pressure or intimidation.” [11:12]

• Federal Reserve Chair Terms:

  • Powell’s 4-year chair term ends in May, but he remains a Fed governor until January 2028.
  • Jill: "Just because you have a new chairman doesn’t mean that chairman can actually dictate policy. It’s still a vote." [13:22]

• Importance of Fed Independence:

  • If politicians control rates, they tend to push them down for short-term gain, risking long-term inflation.
  • Jill references Paul Krugman’s analysis of Turkey as a cautionary tale.

Notable Quotes & Memorable Moments

• Gayle King (on impact of a 10% cap):
  "It is unambiguously a great thing for consumers. The question is how long would it last?" [06:05]

• Jill (on industry pushback):
  "The financial services industry does a ton of lobbying with the lawmakers in D.C. ... they’re coming out hard on this. There is no doubt." [08:38]

• Dennis Dollar (quoted by Jill/Mark):
  "The president cannot set interest rates on a credit card any more than he can set the Fed funds rate." [08:21]

• Powell (video message as paraphrased by Mark):
  "The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President." [11:12]

• Jill (advice to listeners):
  "If you're carrying credit card balances, you know what you have to do. You got to go highest interest to lowest interest." [08:50]

Timestamps for Important Segments

• 04:52 – Can the president cap credit card rates?
• 05:20 – Example of savings from a 10% cap
• 06:33 – How Fed decision impacts credit card rates
• 07:25 – Likelihood and effectiveness of a one-year cap
• 08:16 – Industry lobbying and concerns over riskier borrowers
• 09:13 – DOJ investigation into Federal Reserve Chair Powell
• 11:12 – Powell’s video response on Fed independence
• 13:04 – Discussion on Powell’s future
• 13:44 – Importance of central bank independence

Final Thoughts

Jill and her team provide a clear-eyed examination of a hot-button issue impacting millions of Americans. While a presidential proposal to cap credit card rates makes headlines and could offer significant short-term relief for consumers, the legal, political, and economic barriers remain steep. At the same time, ongoing tensions between the White House and the Federal Reserve reinforce the importance of independent monetary policy. Listeners are reminded to focus on what they can control: prioritize paying down high-interest debt and stay alert to political developments that could affect personal finance.

For more financial advice and to submit your questions, visit jillonmoney.com.