Money Rehab with Nicole Lapin - Trump Wants to Cap Credit Card Interest at 10%. Here's What That Actually Means for You.

Episode Date: March 2, 2026

President Trump wants to cap credit card interest rates at 10%, and if you're one of the millions of Americans drowning in credit card debt, that sounds like a dream. But Nicole breaks down why this proposal might not be the hero story it seems, and what you should actually be doing right now while Washington debates. Nicole explains the real reason a rate cap could backfire, why people with lower credit scores could end up worse off, and the actionable moves you can make today (no legislation required). From the debt avalanche method to balance transfers, personal loans, and a surprisingly simple phone call that could save you thousands, this episode is your full playbook for escaping the high-interest debt trap. Check out Nicole’s financial literacy course The Money School  Find a Financial Advisor or Financial Coach from Nicole’s company Private Wealth Collective Watch video clips from the pod on Money Rehab’s Instagram and Nicole Lapin’s Instagram Here's what Nicole covers today:  00:00 Are You Ready for Some Money Rehab?  00:16 Trump's 10% Credit Card Rate Cap, Explained  01:17 Why This Isn't the Win It Sounds Like  02:10 Who Could Lose Access to Credit Entirely  02:52 The Payday Loan Trap Nobody's Talking About  03:12 What You Can Do Right Now  03:53 Know Your APR  04:31 The Debt Avalanche Method  05:09 Balance Transfer Cards and Consolidation Loans  06:27 How to Negotiate Your Interest Rate  07:01 Why Even $25 Extra a Month Matters  07:41 Tip You Can Take Straight to the Bank All investing involves the risk of loss, including loss of principal. This podcast is for informational purposes only and does not constitute financial, investment, or legal advice. Always do your own research and consult a licensed financial advisor before making any financial decisions.

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money rehab. Make sure to use our URL so they know we sent you. Terms and limitations apply. Subject to approval and eligibility. Built cards are issued by column N-A, member FDIC pursuant to from Mastercard International Incorporated. I'm Nicole Lapton, the only financial expert you don't need a dictionary to understand. It's time for some money right now. Let's break down a financial headline that's causing a lot of confusion right now. President Trump wants to cap credit card interest rates at 10% APR. And if you're somebody carrying credit card debt right now, and let's be real, millions of Americans are,

probably locked into this topic. Because that number sounds a lot better than the rates many of the rates. us are seeing right now. Listen, it all sounds fine and dandy until you think about how lending really works. So today, I'm breaking it down. First things first, this is a proposal. It is not a rule. It is not a law. It is not a done deal. There is no executive order. There's no legislation, no regulation actually in effect. So if you log onto your credit card account today, literally nothing has changed. Credit card interest is simply out of control. Americans owe a total of $1.2 trillion in credit card debt. APR in the U.S. is just over 21% according to the Federal Reserve, but some cards are charging

28, 29, even 30% or more. That means you could be paying hundreds of dollars a month and barely even touching the actual balance. And with prices rising across the board, food, housing, transportation, insurance, this kind of high interest debt starts to feel like a trap that you cannot escape. So if you have a big credit card bill, you are probably loving this. Banks are not. And here's the plot twist. Credit card holders shouldn't be loving this either. From the bank's POV, credit cards are a huge profit center, so that is a big part of their opposition to this. But here's the real reason that capping interest rates is a potential problem for all of us. It might limit access to credit. Now, this sounds unrelated, but here's the link. Your credit card

APR is based on risk. Higher credit score, lower APR. Lower credit score, higher APR. Is basically a that is not a moral judgment. That is just how unsecured lending works. With secured lending, creditors can take your collateral if you don't pay, like your home in the case of a mortgage or your car in the case of a car loan. So if you cap the rate at 10%, lenders lose the ability to price for risk. And when lenders can't price for risk, stop lending to risk, period. Meaning the real question isn't, when will my APR drop? The real question is, who the heck is still going to get approved. Because if you've got a pristine credit report, you probably are still going to get credit. If you don't, though, you might not get a cheaper rate on the card. You might not get

the card at all. And when people get shut out of mainstream credit, they don't stop needing money. They just get pushed into worse options. Payday loans, title loans, cash advances, the stuff with triple-digit interest rates that make credit card APRs look lovely. We have to be honest about this trade-off. A cap might reduce interest for some borrowers, but it can also reduce access for many others. So, no, this is not a credit card companies or evil problem solved thing. This is a if you change the price of credit, you change the whole equation, namely who gets it. So instead of a white horse, that's just a Trojan horse, here's what you can do to help yourself if you are carrying high interest rate debt. Don't wait around for a political promise to maybe turn into action.

because while you're waiting, that interest is compounding every single day. I have personally been there. I've had credit card debt with sky high interest rates. And when I finally got out of it, it changed my life and my mission. It is why I do this show, because compound interest is no joke. It can work against you in the case of debt, and it can work in your favor in the case of investing. I would much rather see you on the wealth-building side of the compound interest equation. So if you're in high interest debt today, let's make a plan.

First, start with your APR. Know exactly what you're paying. You can't fix what you can't see. So step one is simple, but it's really powerful. Pull up your most recent credit card statements and check the APR annual percentage rate on each card. You'll often find it in the fine print on page two or three of your statement. The average credit card APR right now is over 21%, but yours could be higher or lower. Remember, depending on your credit score.

What matters most is the order. Which card is charging you the most interest every month? That is the one that we're going to target first. This is also where you figure out how much of your monthly payment is going toward interest versus actually reducing your balance. And for many people, that number is so, so frustrating, but it's also so motivating. If you have multiple cards, automate extra payments to the card with the highest APR first. Once you know which card is charging the most interest, make a plan to hit the money. that one the hardest. This is called the debt avalanche method compared to the snowball method,

and it is the most cost-effective strategy for paying off debt. It's the one that I used. Next, look into balance transfer cards or personal loans to consolidate at a lower rate. If your credit is in decent shape, you might be able to refinance a debt to a lower interest rate, which could save you thousands of dollars and help you pay it off faster. There are two common ways to do this, balance transfer credit cards and debt consolidation loans. Balance transfer credit cards offer 0% interest for a promotional period, usually 12 to 21 months. If you're approved, you move your existing high interest balance to the new card and pay it off interest-free during that window. Just be sure to check for transfer fees, typically 3 to 5%, and make a plan to pay it off before the promo period ends or your rate could skyrocket.

Debt consolidation loans are fixed-rate personal loans used to pay off credit cards. The benefit is that you're trading variable high interest rate debt for a single monthly payment at a lower predictable rate, usually between 6 to 12%, depending on your credit profile. Check out sites like lending clubs, SOFI, and credit karma to compare offers. But of course, read the fine print and watch out for origination fees. Pro tip, don't consolidate debt if you're just going to keep spending on your cards and rack up new balances. This really only works if you are completely ready to stop the bleeding and shift into payoff mode. Or forget the balance transfer and call your card issuer and negotiate your interest rate.

Yes, you can actually do this. I have done it before. I have recorded it before and it works more often than you think. You just have to ask. Here's what you do. Call up the number on the back of your card. Explain that you've been a longtime customer, that you've been making your payments on time, hopefully. And you'd like to request a lower APR, especially given your history with the company.

If you've received better offers from other card issuers, mention that too. And if they say no, ask if there's anything you can do to qualify for a lower rate, like a balance review or a credit check. This can take about 10 minutes and potentially save you hundreds, if not thousands of dollars over time. It is low effort, high reward, my favorite. Even an extra 25, 50, 100 bucks a month on top of the minimum payment can shave months off your payoff timeline and save you serious money on interest. Look, whether this credit card cap happens or not, it's a symptom of a bigger issue. Consumers are under serious financial pressure. A 10% cap would be a huge shift from where we are now,

but the outcome depends entirely on the details, how it's implemented, who it applies to, and how the banks respond. But no matter what happens in Washington, here's what matters most. Know your numbers. You can't control what happens in Washington. You can only control yourself. So know your APR. Know how much that interest is costing you. And most importantly, know your plan to get out of debt, because no one should be stuck paying 20, 25, 30% interest for the rest of their life. For today's tip, you can take straight to the bank. Opt into credit line increases strategically and then don't spend a dollar of it. Here's why.

Credit utilization, that's the percentage of your limit that you're actually using. And it is one of the most important factors in your credit score. And high utilization is often what keeps people trapped in these high APR credit cards. When your limit goes up, but you're bound. stays the same. Your utilization drops, sometimes really dramatically, which can boost your score and open the door to lower rate balance transfer options, cheaper consolidation loans, or better negotiation leverage with your current issuer. The key is treating that increased limit as invisible money. You don't touch it. You just use it to unlock cheaper borrowing and escape the interest

trap faster. This is how you use credit to fight credit, not to fuel it.