President Donald Trump’s latest financial policy proposal has sparked a sharp response from a prominent Wall Street figure.

On Truth Social, Trump announced a plan to cap credit card interest rates at 10% for one year, starting Jan. 20, aiming to protect consumers from rates that often reach 20% to 30% for those with weaker credit histories. Bill Ackman, billionaire CEO of Pershing Square Capital Management, quickly opposed the idea, warning of severe unintended consequences for millions of Americans. Ackman shared his concerns in a series of posts on X, though his initial critique was later deleted.

The proposal has ignited a heated discussion about economic policy and consumer protection. Critics, including Ackman and financial experts, argue that such a cap could drastically limit credit access and harm the very people it aims to help.

Ackman Warns of Credit Access Fallout

Let’s be clear: Trump’s heart may be in the right place, but this policy could backfire spectacularly. Ackman didn’t mince words, stating, “This is a mistake, president,” in a now-deleted post on X, as the Daily  Mail reports. That blunt assessment cuts to the core of why heavy-handed price controls often fail to achieve their intended goals.

Ackman’s deeper concern is that a 10% cap prevents lenders from pricing risk appropriately. He predicts credit card companies will simply cancel cards for millions, particularly those with weaker credit profiles who need access most.

And where do those consumers turn? Ackman warns they’ll be pushed into the arms of loan sharks or payday lenders with sky-high rates and predatory terms. It’s a classic case of a well-meaning idea creating a worse problem.

Trump’s Push for Affordability Questioned

Trump framed his plan as a stand against exploitation, declaring on Truth Social, “Please be informed that we will no longer let the American Public be 'ripped off.'” That’s a powerful message for struggling families drowning under credit card debt. But does the solution match the rhetoric?

With nearly half of U.S. cardholders carrying an average balance of $6,730, the burden of high interest is real. Yet, capping rates might not ease the pain if it slashes availability. Financial experts like Gary Leff and Nicholas Anthony echo Ackman’s fears, cautioning that reduced credit access could tank economic activity.

Leff, a CFO and industry blogger, told the Daily Mail that taking away cards forces consumers to costlier options like payday loans. It’s not hard to see how a policy meant to save money could end up costing more.

Regulatory Reform as a Better Path

Ackman offers a smarter alternative: boost competition through regulatory reform. He argues that easing barriers for new entrants and technologies would naturally drive rates down without gutting credit access. Why swing a sledgehammer when a scalpel will do?

He also takes a swipe at credit card rewards programs, pointing out how premium cardholders benefit at the expense of lower-income consumers. Discount fees on high-end cards can hit 3.5% or more, while basic cards sit at 1.5%, meaning everyday folks subsidize the elite’s perks. That’s a regressive setup worth rethinking.

Legal hurdles add another layer of doubt to Trump’s plan. A nationwide cap likely needs congressional approval, and the White House’s authority to enforce it remains murky. It’s a policy that sounds bold but may stumble before it starts.

Balancing Intent with Economic Reality

The goal of affordability resonates with anyone watching their bills pile up. But good intentions don’t guarantee good outcomes, and this cap risks leaving millions in a worse spot.

Instead of price controls, let’s focus on fostering a market where competition drives fairness.

Ackman and others have laid out the pitfalls; now it’s up to policymakers to heed the warning and find a path that truly helps American families.