by Move could bring welcome relief to many consumers, but also could limit financing for higher-risk consumers
WASHINGTON — On Jan. 9, President Trump announced via his social media app Truth Social that he supported a 10% cap on credit card interest rates. In part, the post read, “Please be informed that we will no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30%.” It also indicated that the cap takes effect, Jan. 20 for a one-year period.
While the bill could bring welcome relief to consumers who are struggling with high-interest credit card debt, its implications are far-reaching, particularly in the retail industry, which attracts shoppers with a mix of financing options. A 2025 article by financial news website The Motley Fool found that furniture and appliances were among the most common categories for buy now, pay later financing, at approximately 36%. That’s significant and speaks to the importance of financing options for consumers when purchasing furniture.
The Home Furnishings Association, a Roseville, California-based nonprofit that describes itself as devoted to the needs of home furnishings retailers, issued a statement opposing the proposed 10% annual percentage rate cap.
“Consumer financing is vital to both the home furnishings industry and the households we serve,” said Peter Theran, CEO of the Home Furnishings Association. “In 2025, a substantial share of home furnishings sales came from credit cards and promotional financing plans. This blanket measure would cut tens of millions of families off from the safe, regulated financing they rely on to furnish their homes. It would also impact retailers by reducing consumer spending power.”
On Jan. 9, the American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum and Independent Community Bankers of America released a joint statement opposing the proposed executive order.
“We share the president’s goal of helping Americans access more affordable credit. At the same time, evidence shows that a 10% interest rate cap would reduce credit availability and be devastating for millions of American families and small businesses who rely on and value their credit cards, the very consumers this proposal intends to help. If enacted, this cap would only drive consumers toward less regulated, more costly alternatives. We look forward to working with the administration to ensure Americans have access to the credit they need.”
That sentiment was echoed by the Home Furnishings Association, which said that rather than blunt price controls that restrict access to credit, the association advocates for transparent loan terms and responsible financing solutions that enable retailers to give consumers purchase options that meet their budget needs.
“Consumer financing options help families afford essential purchases for their home,” Theran said. “A hard APR cap would severely limit the availability of these options; consumers with credit scores below 740 would be hit the hardest, further reducing their access to credit and disproportionately affecting credit-building households.”
Home News Now also reached out to several retailers for their opinion on the cap. Queen City Homestore, a Charlotte, North Carolina-based retailer with 16 locations, declined to comment. Jeff Harris, president and CEO of the world’s largest furniture store, Furnitureland South, which is headquartered in Jamestown, North Carolina, stated: “Anything any administration can do to help the consumer lower their costs or expenses should have a positive impact on retail.”
For certain retailers, like Golden Dreams Mattress in Carlsbad, California, which caters to the high-end market, the cap won’t have much of an effect on its business. “As a high-end luxury dealer, most of our customers don’t rely on financing,” said owner Nate Cangemi. “Certainly they use credit cards, but typically it’s just to get their points on the high-ticket investment they’re making.”
However, the luxury segment is not representative of all furnishings retailers. Historically, those who shopped at high-end retailers were typically associated with great credit. These days, that is not always the case.
Versatile Credit, a consumer financing software company, wrote in an analysis of the 2025 Black Friday and Cyber Monday period: “… Unprecedented numbers of financially qualified applicants are seeking and utilizing secondary and tertiary financing options to manage budgets or maximize promotional terms. Prime approvals made up 2% less of the total approvals this Black Friday weekend, with that volume shifting directly into sub-prime offers that successfully capture the newly defined high-income, sub-prime applicant.”
Theran, of the HFA, added: “The key to this is really that it is important that we look at this topic in more depth than just ‘high fees’. In order to get the kind of access to credit and approval rates needed to effectively enable a large percentage of shoppers to include consumer credit in their purchase decisions, there needs to be a range of fee options, which is what [the Home Furnishings Association] is trying to highlight.”
