Bipartisan Bill To Pressure Trump in Honoring Campaign Promise of 10% Credit Card Interest Rate Cap

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A new bipartisan bill introduced by Senators Bernie Sanders and Josh Hawley seeks to cap credit card interest rates at 10%, reviving an issue that has long divided lawmakers. The proposal follows a campaign promise made by former President Donald Trump, who advocated for a temporary cap to provide financial relief for struggling Americans.

Currently, credit card interest rates exceed 20% on average, with some issuers charging over 25%, leading to substantial profits for banks while consumers fall deeper into debt. With U.S. credit card balances surpassing $1.17 trillion in late 2024, the bill is positioned as a direct intervention against what some lawmakers call “predatory lending.”

America’s Credit Card Debt Crisis

The numbers paint a concerning picture of consumer debt. Nearly 47% of American credit cardholders carry a balance from month to month, subjecting them to high interest rates. Additionally, more than half of these individuals only make the minimum monthly payment, significantly increasing the total cost of their purchases over time.

A study from TransUnion revealed that the average credit card balance per borrower rose to $6,360 by the end of 2024, marking a 16% increase from the previous year. Meanwhile, delinquency rates have spiked, with 3.4% of credit card accounts now classified as seriously delinquent (90+ days past due).

In recent years, banks have benefited enormously from rising credit card interest rates. According to the Consumer Financial Protection Bureau (CFPB), credit card issuers collected over $130 billion in interest and fees in 2023 alone. This trend reflects a steady rise in credit card costs for consumers, while banks continue to expand their profit margins. Bank of America and JPMorgan Chase reported record-breaking revenue from credit card interest, surpassing $40 billion combined in 2024.

How the Proposed Rate Cap Would Work

The new bill aims to amend the 1968 Truth in Lending Act, setting a permanent cap of 10% on credit card interest rates. Supporters argue that this would offer immediate relief to Americans drowning in debt, preventing excessive interest from making balances unmanageable.

However, the bill faces strong opposition from financial institutions. Banking industry representatives argue that a strict interest rate cap would lead to tighter credit restrictions, making it harder for individuals—especially those with lower credit scores—to qualify for credit cards.

Supporters and Critics Weigh In

Proponents of the bill, including Sanders and Hawley, frame it as a necessary step to prevent what they call “loan sharking” by major credit card companies. “Working Americans shouldn’t be paying 25% or more in interest,” Sanders said, describing current rates as exploitative.

Consumer advocacy groups like the National Consumer Law Center have backed the bill, stating that “excessively high interest rates are a primary driver of long-term financial instability for millions of Americans.” Their research found that 40% of low-income households rely on credit cards for essential expenses like groceries and medical bills, often getting trapped in cycles of revolving debt.

On the other hand, banking institutions and some economists warn that capping credit card interest rates could reduce credit availability, forcing lenders to find other ways to recover potential losses. This might include increasing annual fees, imposing stricter lending requirements, or eliminating popular credit card rewards programs.

What’s Next for Consumer Relief from Credit Card Interest Rates?

The proposal has sparked intense debate, particularly as President Trump has yet to indicate whether he will back the measure fully. While his campaign previously supported a temporary cap, this bill proposes a permanent rate ceiling, making it a tougher sell among some conservative lawmakers.

Financial experts predict that if the bill gains traction, credit card companies will push back aggressively. While consumer groups applaud the initiative, the final outcome will depend on congressional negotiations and whether the banking industry’s lobbying efforts successfully derail the proposal.

The potential passage of this bill could reshape the credit card industry significantly. If banks reduce credit access, alternative lending solutions, such as buy-now-pay-later (BNPL) programs, could see a surge in adoption. Companies like Affirm and Klarna have already positioned themselves as alternatives to traditional credit cards, offering installment-based financing without high interest rates.

Should Congress pass the 10% cap on credit card interest rates? Tell us what you think!

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