Credit card companies are easy to vilify, but the wrong target for consumer ire
What's the endgame here?
A proposal pitched as a way to help consumers struggling with interest rates is unsettling the financial sector. As President Donald Trump and other populist lawmakers push for a 10% cap on credit card interest rates, banks argue that such a cap could limit access to credit.
Trump initially proposed during his 2024 presidential campaign a one-year 10% cap to help “working Americans catch up” on payments. This was due to higher interest rates and inflation running near 3%.
It seemed like a throwaway line at the time. And financial analysts quickly dismissed it as election-year politics that would go nowhere in Congress.
But with Trump back in the White House, the credit card interest rate cap issue is drawing support from an ideologically disparate group of lawmakers, to put it mildly.
Early last year, Sens. Bernie Sanders (I-VT) and Josh Hawley (R-MO) teamed up with Reps. Alexandria Ocasio-Cortez (D-NY) and Anna Paulina Luna (R-FL) on interest rate cap legislation. Unlike the president’s suggestion, the bill aimed to cap rates for five years and force creditors to forfeit all debt interest if they knowingly violated the ceiling. The bill failed to get a hearing in either the House or the Senate.
The proposal gained new momentum late last year after the Federal Reserve Bank of New York reported that American adults carried $1.27 trillion in credit card debt. That’s nearly 6% higher than 2024. Nearly half carried a balance month to month, and 23% did not have a clear repayment plan.
The Federal Reserve reported Americans were paying, on average, between 19% and 21% in interest on credit cards. It was around 12% a decade ago.
Supporters saw this as a new urgency for Washington to act.
Following Sanders’s accusations that Trump reneged on his promise, Trump in January resurrected the 10% cap proposal.
“We will no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more,” Trump wrote on Truth Social.
Weeks later, at the World Economic Forum, Trump said the cap would help Americans save for a home. “[Americans] have no idea they’re paying 28% [interest]. They go out there, a little late on their payment, and they end up losing their house,” he said. “It’s terrible.”
While Trump hasn’t endorsed the Hawley-Sanders legislation, the Missouri Republican used the president’s comments to press Congress into acting.
“It’s not just wrong, it’s exploitive,” Hawley said. “And it needs …
What's the endgame here?
A proposal pitched as a way to help consumers struggling with interest rates is unsettling the financial sector. As President Donald Trump and other populist lawmakers push for a 10% cap on credit card interest rates, banks argue that such a cap could limit access to credit.
Trump initially proposed during his 2024 presidential campaign a one-year 10% cap to help “working Americans catch up” on payments. This was due to higher interest rates and inflation running near 3%.
It seemed like a throwaway line at the time. And financial analysts quickly dismissed it as election-year politics that would go nowhere in Congress.
But with Trump back in the White House, the credit card interest rate cap issue is drawing support from an ideologically disparate group of lawmakers, to put it mildly.
Early last year, Sens. Bernie Sanders (I-VT) and Josh Hawley (R-MO) teamed up with Reps. Alexandria Ocasio-Cortez (D-NY) and Anna Paulina Luna (R-FL) on interest rate cap legislation. Unlike the president’s suggestion, the bill aimed to cap rates for five years and force creditors to forfeit all debt interest if they knowingly violated the ceiling. The bill failed to get a hearing in either the House or the Senate.
The proposal gained new momentum late last year after the Federal Reserve Bank of New York reported that American adults carried $1.27 trillion in credit card debt. That’s nearly 6% higher than 2024. Nearly half carried a balance month to month, and 23% did not have a clear repayment plan.
The Federal Reserve reported Americans were paying, on average, between 19% and 21% in interest on credit cards. It was around 12% a decade ago.
Supporters saw this as a new urgency for Washington to act.
Following Sanders’s accusations that Trump reneged on his promise, Trump in January resurrected the 10% cap proposal.
“We will no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more,” Trump wrote on Truth Social.
Weeks later, at the World Economic Forum, Trump said the cap would help Americans save for a home. “[Americans] have no idea they’re paying 28% [interest]. They go out there, a little late on their payment, and they end up losing their house,” he said. “It’s terrible.”
While Trump hasn’t endorsed the Hawley-Sanders legislation, the Missouri Republican used the president’s comments to press Congress into acting.
“It’s not just wrong, it’s exploitive,” Hawley said. “And it needs …
Credit card companies are easy to vilify, but the wrong target for consumer ire
What's the endgame here?
A proposal pitched as a way to help consumers struggling with interest rates is unsettling the financial sector. As President Donald Trump and other populist lawmakers push for a 10% cap on credit card interest rates, banks argue that such a cap could limit access to credit.
Trump initially proposed during his 2024 presidential campaign a one-year 10% cap to help “working Americans catch up” on payments. This was due to higher interest rates and inflation running near 3%.
It seemed like a throwaway line at the time. And financial analysts quickly dismissed it as election-year politics that would go nowhere in Congress.
But with Trump back in the White House, the credit card interest rate cap issue is drawing support from an ideologically disparate group of lawmakers, to put it mildly.
Early last year, Sens. Bernie Sanders (I-VT) and Josh Hawley (R-MO) teamed up with Reps. Alexandria Ocasio-Cortez (D-NY) and Anna Paulina Luna (R-FL) on interest rate cap legislation. Unlike the president’s suggestion, the bill aimed to cap rates for five years and force creditors to forfeit all debt interest if they knowingly violated the ceiling. The bill failed to get a hearing in either the House or the Senate.
The proposal gained new momentum late last year after the Federal Reserve Bank of New York reported that American adults carried $1.27 trillion in credit card debt. That’s nearly 6% higher than 2024. Nearly half carried a balance month to month, and 23% did not have a clear repayment plan.
The Federal Reserve reported Americans were paying, on average, between 19% and 21% in interest on credit cards. It was around 12% a decade ago.
Supporters saw this as a new urgency for Washington to act.
Following Sanders’s accusations that Trump reneged on his promise, Trump in January resurrected the 10% cap proposal.
“We will no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more,” Trump wrote on Truth Social.
Weeks later, at the World Economic Forum, Trump said the cap would help Americans save for a home. “[Americans] have no idea they’re paying 28% [interest]. They go out there, a little late on their payment, and they end up losing their house,” he said. “It’s terrible.”
While Trump hasn’t endorsed the Hawley-Sanders legislation, the Missouri Republican used the president’s comments to press Congress into acting.
“It’s not just wrong, it’s exploitive,” Hawley said. “And it needs …
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