WASHINGTON – 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.
“We fully support pro-consumer policies that give consumers more choices and flexibility for their finances…But rate caps on credit products are not the solution American consumers need,” they wrote.
Credit card debt among Americans has only increased every year. The nation’s credit card balance reached $1.17 trillion in the third quarter of 2024.