Sens. Bernie Sanders, I-Vt., and Josh Hawley, R-Mo., introduced a bill on Tuesday that would cap credit card interest rates at 10% − an effort by two lawmakers who rarely see eye to eye.
Credit card interest rates refer to the fee a card issuer charges if a consumer doesn’t pay off their credit card balance in full by a certain date. The average credit card interest rate is over 20%, according to data from Bankrate.
Sanders and Hawley’s bill comes after President Donald Trump vowed in the 2024 race to temporarily cap credit card interest rates at 10%.
“When large financial institutions charge over 25 percent interest on credit cards, they are not engaged in the business of making credit available,” Sanders said in a statement. “They are engaged in extortion and loan sharking. We cannot continue to allow big banks to make huge profits ripping off the American people.”
Hawley said that the bill “is a simple way to provide meaningful relief to working people.”
The legislation would be in effect for five years, according to a press release.
The proposal will likely face scrutiny among bank and credit card industry lobbyists. The American Financial Services Association, a national trade association for the consumer credit industry, argued in a September statement that rate caps are “unworkable” and “actually harm the consumers policymakers are trying to help by limiting the types of credit” Americans depend on.
