Credit card debt is an increasingly heavy burden for millions of Americans.

Selena Cooper, 26, is among those dealing with the strain. A former paralegal at the Social Security Administration, she was left without a stable income when the US government shut down a few months ago. She lost her job permanently after Christmas.

Cooper first missed her credit card payments in October, when her paycheques ground to a halt. Since then, she said her debt across her three credit cards has accumulated to $6,000.

Last month, her card issuers Capital One and American Express notified her that they were raising her interest rates due to late payments. The rate on her Capital One cards doubled to 16%, while the one on her Amex jumped from 10% to 18%, she said.

Credit card rates have caught the attention of US President Donald Trump. Last week, he proposed capping them at 10% for one year from 20 January – an idea that Cooper said “would help a little bit, but it’s still not going to get me out of debt”.

Cooper, who lives in Columbia, South Carolina, is now leaning on her photography business for income. “It’ll pay small bills – but not my credit card debt,” she said.

Credit card interest rates have been rising in recent years. They averaged about 22% as of November, up from 13% a decade ago, Federal Reserve data shows. 37% of adults carry a credit card balance, and overall credit card debt in the US totals more than $1tn.

“It does show that consumers are feeling pinched, they’re going to continue to feel pinched,” Susan Schmidt, portfolio manager at Exchange Capital Resources in Chicago, told the BBC.

“I think the Trump administration is trying to find a way out of it.”

Trump’s proposal, which was among his campaign promises, was met with a swift backlash from bank executives, who say a cap would erode consumers’ access to credit. Banks could cut credit limits or close riskier accounts.

Interest charges are a source of revenue for banks and other big lenders, amounting to $160bn in 2024, according to the Consumer Financial Protection Bureau – an agency that Trump largely dismantled last year.

Banks are already pushing to protect that income, arguing that a rate cap would backfire to the detriment of consumers. JP Morgan hinted at the possibility of legal action.

“People will lose access to credit on a very, very extensive and broad basis, especially the people who need it the most,” Jeremy Barnum, JP Morgan’s chief financial officer, warned on the company’s earnings call on Monday.

Jane Fraser, Citigroup’s chief executive, also pushed back against the proposal on Wednesday and warned of a “severe impact on access to credit and on consumer spending across the country”.

Some analysts and economists agree that a cap, on its own, might not benefit consumers as much as Trump and lawmakers across the political aisle claim.

“A 10% cap may not be the right solution because the people that are already in trouble, that’s not necessarily going to help them,” said Schmidt of Exchange Capital Resources.

Benedict Guttman-Kenney, an assistant professor of finance at Rice University, said banks might respond by limiting how much they lend to people with lower credit scores, who are considered higher-risk borrowers. Those are the people most at risk of losing access to credit cards, he said.

Banks, he added, might also try to recoup their revenue elsewhere, like by raising annual fees or late fees.

“It’s not clear that people are going to be better off,” Guttman-Kenney said. “They’re still paying similar amounts of money.”

But he noted that some bank expenses are “bloated”, meaning they have room to cut costs to keep their margins intact. They could, for example, trim down how much they spend on marketing, he said.

And a recent Vanderbilt University study found that Americans would save roughly $100bn a year in interest costs if a 10% rate cap were to be implemented.

“This is something people would see, they would notice, they would feel it,” said Brian Shearer, a researcher at Vanderbilt’s Policy Accelerator and the author of the study.

“This alone would impact their household budgets substantially.”

Shearer questioned a key argument put forward by bank executives and their lobbyists: that any reduction in rates will necessarily lead to a reduction in lending. He pointed to banks’ robust margins in the credit card market.

Interest payments, he added, do not account for the majority of the revenue that banks earn on credit cards.

“No policy is without some pros and cons,” Shearer said. “To continue lending, banks would have to reduce rewards to some extent, especially to people with lower FICO scores (credit scores).

“However, the savings from interest, even to those people who lose some rewards, would far exceed the lost rewards.”

Morgan, 31, who asked to use only her first name, is also among those struggling to pay down thousands of dollars.

Since last May, she has been using her Discover card to pay for her two-year-old daughter’s childcare, while unemployed. She said she decided to send her daughter to daycare because she needed the freedom, due to struggles with her mental and physical health.

Those payments have left her with $6,700 in credit card debt.

Morgan’s husband works in the military and pays for the family’s other expenses. Through a service member benefit programme, she secured an interest rate of roughly 3% on her credit card. Had she been forced to pay the typical 27% interest rate, sending her daughter to childcare would not have been an option, she said.

“I’m losing sleep over the $6,700, but I have a little wiggle room to be able to do that because once I get a job, I can pay it off,” Morgan said.

That’s why Trump’s proposal to cap credit card rates at 10% struck her as a “step in the right direction”.

“I hope it actually comes to fruition,” she said. “It’s one of the few things he’s done that prioritises people over businesses.”

The idea to cap credit card rates has been floating in legislative circles for years, and it has garnered bipartisan support.

Senator Josh Hawley, a Republican, and Senator Bernie Sanders, a Democrat, last year introduced a bill to cap credit card interest rates at 10%.

Democratic Senator Elizabeth Warren said in a statement that she spoke with Trump this week and “told him that Congress can pass legislation to cap credit card rates if he will actually fight for it”.

“If he really wants to get something done, including capping credit card interest rates or lowering housing costs, he would use his leverage and pick up the phone,” Warren said.

Still, there are hurdles ahead. Getting Congress on board could prove challenging, despite some support on both sides of the aisle.

House Speaker Mike Johnson this week distanced himself from the rate cap proposal, citing “negative secondary effects” and a pullback in lending as a result. “It’s something that we’ve got to be very deliberate about,” Johnson said at a press conference.

And banks are poised to keep pushing hard against it.

“If the Trump administration backs down, I think it would be because of the bank lobbying,” said Shearer, of Vanderbilt.

“This is their cash cow. They’re not going to let it go easily.”