- Sens. Bernie Sanders and Josh Hawley brought forward legislation to cap credit card interest rates at 10%. That would be a significant reduction.
- Credit card companies reportedly have more than a 50% profit margin.
- President Donald Trump supported the measure in September 2024.
Sens. Bernie Sanders, I-Vt., and Josh Hawley, R-Mo., introduced a bill to cap credit card interest rates at 10%, a significant reduction from the current average of 28.6%. The proposal aligns with a pledge President Donald Trump made during his campaign, which they hope will help garner support.
“When large financial institutions charge over 25% interest on credit cards, they are not engaged in the business of making credit available. They are engaged in extortion and loan sharking,” Sen. Sanders said.
Point phone camera here
If the bill is passed and signed into law, it would immediately cap interest rates at 10% for five years.
President Donald Trump’s support for the proposal
President Trump expressed support for such a measure in September 2024.
“While working Americans catch up, we’re going to put a temporary cap on credit card interest rates at 10%; we have no choice,” Trump said in September. “Because they can’t afford to pay off their credit card.”
How much do credit card companies already profit?
Credit card companies charged consumers a record $130 billion in interest and fees in 2022. Americans currently have $1.17 trillion in credit card debt, also a record.
“Working Americans are drowning in record credit card debt while the biggest credit card issuers get richer and richer by hiking their interest rates to the moon,” Hawley said. “It’s not just wrong; it’s exploitative.
During a congressional hearing in November 2024, the heads of Visa and Mastercard revealed their companies profit margins are 50% or greater.
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The senators said their bill could save Americans thousands in interest. They gave an example of an individual with a $5,000 balance. If that person pays the minimum $166 a month, it would take them 24 years to pay it off and cost $11,000 in interest. A 10% rate would save them $7,000.
CNBC reported that financial experts worried an interest rate cap could backfire. They said it would reduce access to credit because lenders would cut people off if they’re deemed high risk.
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Senators Bernie Sanders, I-Vt., and Josh Hawley, R-Mo., introduced a bill to cap credit card interest rates at 10%, a significant reduction from the current average of 28.6%.
“When large financial institutions charge over 25 percent interest on credit cards, they are not engaged in the business of making credit available. They are engaged in extortion and loan sharking,” Sen. Sanders said.
If the bill is passed and signed into law it would immediately cap interest rates at 10% for five years. President Trump expressed support for such a measure in September.
Trump: “While working Americans catch up we’re going to put a temporary cap on credit card interest rates at 10%, we have no choice. Because they can’t afford to pay off their credit card.”
Credit card companies charged consumers a record $130 billion in interest and fees in 2022. Americans currently have $1.17 trillion in credit card debt, also a record.
During a congressional hearing in November, the heads of Visa and Mastercard revealed their companies profit margins are 50% or greater.
Hawley: That’s incredible. 50% profit margin. I mean that’s absolutely unbelievable.
The senators say their bill could save Americans thousands in interest. They gave an example of an individual with a $5,000 balance. If that person pays the minimum $166 a month, it would take them 24 years to pay it off and cost $11,000 in interest. A 10% rate would save them $7,000.
CNBC reported that financial experts worried an interest rate cap could backfire. They said it would reduce access to credit because lenders would cut people off if they’re deemed high risk.
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