Hawley and Sanders Propose 10% Cap on Credit Card Interest Rates

The bipartisan bill aims to reduce borrowing costs for consumers but faces criticism over potential unintended consequences for high-risk borrowers.

Senators Josh Hawley (R-Mo.) and Bernie Sanders (I-Vt.) have introduced legislation to cap credit card interest rates at 10%, fulfilling a campaign promise made by former President Donald Trump.
The proposed cap would take effect immediately upon enactment and remain in place for five years, aiming to provide financial relief to working Americans struggling with credit card debt.
Critics argue the cap could limit access to credit for high-risk borrowers, pushing them toward more expensive and potentially predatory alternatives like payday lenders and loan sharks.
Experts highlight that credit card interest rates are often determined by borrower risk, and a cap may lead issuers to stop offering credit to those deemed too risky.
The debate underscores broader challenges in balancing consumer protection with ensuring access to affordable credit, particularly for lower-income and higher-risk individuals.