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.
A good sound bit, but will not work - Credit Card companies will just not offer credit to a vast amount of consumers who have a 600 to 650 FICO Score.
That means all credit cards will no longer offer minimum payments...will be reqired to pay in full as the companies won't carry the paper for 10%....they should make it variable based on some index so it can go up and down.