Remember that ultimatum? Back in January, former President Donald Trump told credit card companies they had to slash interest rates down to 10%. The deadline was January 20th. Spoiler alert: it came and went, and your credit card APR is almost certainly still well above that magic number.
So what happened to the threat? And more importantly, what happens next? To get a read on that, you can look to the politicians or the pundits. Or, you can look to where people are putting real money on the line.
The Smart Money Says 'Don't Hold Your Breath'
On Kalshi, a federally authorized prediction market, there's a contract asking a simple question: "Will credit card rates be capped this year?" The deadline for the bet is January 1, 2027. If a cap happens before then, the "Yes" side wins.
Initially, the "Yes" bets had some momentum. But the mood has shifted. A lot. Right now, the market is pricing in just an 18% probability that credit card rates get capped. The implied probability that they won't? A whopping 84%. Traders have put over $225,000 on this question, and the consensus is pretty clear: don't expect a government-mandated rate ceiling anytime soon.
The political pressure hasn't completely vanished. Senator Elizabeth Warren (D-Mass.) published an op-ed this week calling it a "broken promise on credit cards." But the prediction market is essentially betting that the political will or practical path to enforce such a cap isn't there.
Why a Cap Scares the Financial World
It turns out forcibly capping the price of credit is... complicated. Trump's proposal ran into a wall of opposition from economists and even some Republican leaders. The worry isn't just about bank profits; it's about the entire credit ecosystem.
Dave Grossman, founder of Your Best Credit Cards, warns a cap could lead to banks drastically reducing credit access, especially for riskier borrowers. It could also dismantle the lucrative rewards programs that many consumers love, hitting airlines, hotels, and other industries that benefit from card spending.
The warnings get even more severe. The CEO of Capital One Financial (COF) has said such a cap could potentially trigger a recession by disrupting the engine of consumer spending—a market worth about $6 trillion.
So, the story here isn't just about a missed deadline. It's about a dramatic policy idea that crashed into the hard realities of finance. The market where people bet on outcomes thinks it's likely to stay crashed. For now, your credit card's interest rate is probably safe from government intervention, for better or worse.
