In response to concerns about affordability, President Trump proposed capping interest rates on credit cards at 10 percent. But the federal government’s own credit card — the national debt — is already making life less affordable for all Americans.
U.S. consumers paid $160 billion in credit card interest in 2024, averaging just under $1,200 per household. That’s a lot of money, but it’s only one-sixth as much as the $1.028 trillion we paid in net interest on the federal debt in fiscal 2025.
At $7,600 per household, interest on the federal government’s debt costs more than the average household spent on retirement contributions ($1,991), gas ($2,411), healthcare ($6,197) or groceries ($6,224) in 2024. Even as housing costs have surged, federal borrowing is costing Americans the equivalent of three and a half months of mortgage or rent payments.
One might argue that Americans aren’t really paying $7,600 per household in interest each year, because taxes haven’t risen to cover those costs. That is true — for now — because the federal government is adding its interest costs to the debt, the fiscal equivalent of not even making the minimum credit card payment.
But Americans are already paying higher interest rates on everything from home mortgages to small business loans to credit cards, because, as the Congressional Budget Office has explained, when federal borrowing increases, “the amount of funds available for private investment would decline (a phenomenon known as crowding out), and interest costs would increase.”
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