Trump's 10% Credit Card Rate Cap: Why a Free-Market Purist Says Yes

By Jim Palumbo

"Neither a lender nor a borrower be."

Shakespeare's famous warning in Hamlet captures an ancient distrust of debt that still resonates today.

In early 2026, President Trump reignited a centuries-old debate by proposing a temporary one-year cap on credit card interest rates at 10%, starting January 20. With average credit card APRs hovering around 22-23% and Americans carrying over $1.1 trillion in revolving debt, millions are buried under compounding burdens that feel impossible to escape. Critics quickly labeled the idea "anti-free-market," but as a lifelong free-market purist, I see it differently. True free markets thrive on fair competition and informed choice—not on government-granted loopholes that let big banks charge exploitative rates. This isn't socialism; it's pushing back against predatory practices that distort the market.

The debate revives the ancient concept of usury—once a blanket prohibition on interest, now narrowly defined as excessive or exploitative lending. Let's trace its roots and see why the term still matters today.

Biblical Prohibitions: Interest as Exploitation Among Kin

The earliest strong condemnations of usury appear in the Hebrew Bible. Passages like Exodus 22:25 ("If you lend money to one of my people among you who is needy, do not treat it like a business deal; charge no interest"), Leviticus 25:35-37, and Deuteronomy 23:19-20 explicitly forbid charging interest to fellow Israelites, especially the poor. The command was clear: Do not profit from your brother's hardship.

Interest was allowed on loans to foreigners, suggesting the rule was about protecting the covenant community from internal exploitation rather than banning all lending outright. Still, within the community, any interest on loans to the needy was seen as immoral—taking advantage of vulnerability rather than offering true help.

 "...interest on loans to the needy was seen as immoral"

Early Christianity built on this, with church fathers and medieval canon law extending the ban to all interest, viewing it as sinful because "money should not breed money." Lending at interest was condemned as uncharitable and greedy.

From Absolute Bans to Moderate Allowance: Historical Evolution

Over centuries, attitudes shifted. Aristotle argued money is sterile and shouldn't generate more money. Medieval Europe largely prohibited usury under Church law, though workarounds emerged.

By the Reformation and Enlightenment, moderate interest became accepted as necessary for commerce. In 1545, England legalized interest up to 10%. The modern view emerged: Usury no longer meant any interest, but excessive interest that exploits borrowers.

Benjamin Franklin embodied this pragmatic shift. A champion of thrift and industry, he warned repeatedly against debt: "Rather go to bed supperless than rise in debt." In The Way to Wealth and his advice to tradesmen, he marveled at compound interest's power ("money is of a prolific, generating nature") but urged using it wisely—as a tool for growth, not a trap. Franklin supported credit and paper money to fuel economic expansion, yet he saw unchecked debt as a path to ruin. He would likely view today's 23% credit card rates—often on revolving balances for everyday essentials—with deep skepticism.

Modern Usury: Predatory Practices in a Deregulated Market

Today, "usury" legally means charging interest above state caps (where they exist), but colloquially it describes predatory lending that traps borrowers in cycles of debt. Most consumer loans face some state limits, but credit cards are different. Thanks to a 1978 Supreme Court decision (Marquette National Bank v. First of Omaha) and federal law, national banks can "export" rates from lenient states like Delaware or South Dakota—effectively evading stricter state usury laws.

The extremes are even starker in other corners of consumer finance. Payday loans often carry effective APRs of 300–400%+, locking borrowers into endless renewal cycles. Pawn shops charge exorbitant fees on small loans secured by personal items, frequently resulting in permanent loss of family heirlooms or essential tools. These practices persist in the 21st century through regulatory carve-outs, disproportionately targeting low-income communities. It's a wonder they remain legal—yet they highlight how unchecked lending can veer into outright exploitation.

Credit cards, while not quite as egregious, fit the same pattern: high rates on revolving debt that too often funds necessities, not luxuries.

Pushback Against the Armchair Free-Marketeers

Many self-styled free-market defenders cry "price controls!" at Trump's proposal, claiming any cap distorts markets and reduces credit access. They're not entirely wrong—caps can have unintended consequences, like tighter lending standards for riskier borrowers.

But let's be consistent. In the most ideal free-market utopia, what few laws exist should constrain the very worst behavior: fraud, coercion, and predatory exploitation that undermine truly voluntary exchange. A truly free market requires level playing fields, transparent information, and protections against the kind of asymmetry that lets lenders trap desperate borrowers. When federal rules let banks bypass state consumer protections, or when loopholes enable payday-level predation, that's not freedom—it's rigged cronyism.

As free-market purists, we should oppose predatory practices hardest. Unlimited rates on revolving credit aren't the invisible hand at work; they're the heavy thumb of regulatory capture. A temporary cap—like Trump's 10% idea or bipartisan bills floating similar limits—could reset the market, encourage competition, and protect consumers without permanent distortion. It's not abandoning markets; it's making them fairer.

Franklin would approve of prudence over profiteering. And so should we.

What do you think? Is it time to rein in modern usury, or let rates run unchecked? Share your thoughts below.