Dear Reader,

Let me be clear about something.

I like Trump. Voted for him twice. Wrote books with him.  But this credit card interest rate cap? It's economic insanity.

Here's what Trump just proposed: cap all credit card rates at 10% for one year. Bernie Sanders wants the same thing for nine years. 

When Trump and Bernie agree on economics, you know something's gone terribly wrong.

This isn't helping Americans. It's destroying them.

Let me explain why.

I've studied economics my whole life. Built businesses. Made money in markets. And there's one lesson history teaches over and over: price controls always backfire.

Always.

Venezuela capped prices on food. They got empty shelves and starvation.

Nixon capped prices on gas in the '70s. We got gas lines around the block.

Rent control in New York? Housing shortages for decades.

Every single time governments try to control prices, they create the exact problem they're trying to solve. But worse.

This credit card cap will follow the same script.

Right now, credit card companies charge different rates to different people. Why? Risk.

Someone with great credit pays 15%. Someone with terrible credit pays 29%. That's not exploitation. That's math.

The high-risk borrower is more likely to default. So they pay more to cover that risk. It's basic economics.

Now Trump wants everyone capped at 10%.

What happens? Banks can't make money lending to high-risk borrowers at 10%. The math doesn't work. So they stop lending to them entirely.

Millions of Americans—the ones who need credit most—lose their cards.

Then what? They turn to payday lenders. Loan sharks. Underground credit. Those guys don't follow Trump's cap. They charge 200%. 300%. And they break your legs if you don't pay.

Bill Ackman's right. This pushes people into worse situations than they're in now.

The road to hell is paved with good intentions.

Why are credit card rates at 30% in the first place? Let's be honest about this.

Inflation.

And what caused inflation? Government spending. Printing money like crazy. The Fed kept rates at zero for years. Biden's massive spending bills.

When money loses value, everything costs more. Including borrowing money.

Credit card rates went up because the government destroyed the dollar's purchasing power. Now they want to "fix" the problem they created by controlling prices.

Classic government logic.

Trump's doing this for votes. Bernie's doing it for votes. Neither one cares about the actual economics.

They're playing populist theater. "Look at us fighting the big bad banks!" Meanwhile, they ignore how markets actually work.

Elizabeth Warren calls it a "joke." She's right. But her solution—more regulation through the CFPB—is just as bad. More bureaucrats controlling markets doesn't help anyone except bureaucrats.

The free market already has a solution to high interest rates: competition.

If one bank charges 30%, another bank can charge 25% and steal their customers. That's how it's supposed to work. 

But government regulations make it harder for new banks to compete. So the big banks stay big.

Want lower rates? Remove barriers to entry. Let more banks compete. Stop bailing out the big guys when they fail.

That's the free market solution.

Don't wait for politicians to save you. They won't. They never do.

Here's what smart people do:

If you're carrying credit card debt, stop using the cards. Pay them off. Get out of consumer debt entirely.

Live below your means. Buy assets, not liabilities. Credit cards are liabilities that drain your wealth.

If you need to borrow, use assets as collateral. Home equity. Investment accounts. Those rates are way lower because they're secured.

And for God's sake, educate yourself about money. The school system won't teach you. The government won't teach you. You have to learn it yourself.

Trump's heart might be in the right place. But his economics are dead wrong.

Price controls don't work. They never have. They never will.

The answer to high credit card rates isn't government mandates. It's free markets, competition, and personal responsibility.

Want better rates? Stop inflating the currency. Stop massive government spending. Let banks compete without regulatory strangleholds.

And if you're in credit card debt, the solution isn't Trump or Bernie. It's you. Take control. Pay it off. Get educated.

Because when the government tries to solve your problems, you usually end up with bigger ones.

Free markets work. Government control fails.

Choose wisely.

Robert Kiyosaki

Editor, Money Power and Profit

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