In 2025, the 10 Percent Credit Card Interest Rate Cap Act was introduced in both the U.S. Senate and the U.S. House of Representatives as S. 381 by Senators Bernie Sanders (I-VT) and Josh Hawley (R-MO) and as H.R. 1944 by Representatives Alexandria Ocasio-Cortez (D-NY) and Anna Paulina Luna (R-FL), respectively.
A 10% APR price cap on credit card interest rates would be devastating to banks’ ability to ensure the availability and affordability of credit. In response, card issuers will be forced to tighten credit standards, scale back credit lines, reduce promotional offers (introductory rate offers and balance transfer offers), reduce credit card rewards, and raise costs through higher annual fees and higher monthly maintenance fees.
For consumers, many would lose their cards altogether and the short-term flexible credit they provide. For other customers who are able to keep their cards, their costs would increase while their benefits would decrease.
While all consumers will be impacted – by higher costs, reduced credit access, and fewer benefits – higher-risk borrowers with lower credit scores will bear the brunt of this misguided policy. If enacted, S. 381 and H.R. 1944, or any similar rate cap proposals, would drive consumers away from the highly regulated credit card industry. Instead, those consumers may be forced to turn to far riskier alternatives and will end up paying more for credit. As an example, the average APR for a payday loan in Missouri is 527%.
Likewise, the devastating effects of price caps have been well-documented in both Oregon and Illinois. Interest rate cap laws in those states resulted in a worsening of high-risk borrowers’ financial well-being[1] and the deterioration of the overall financial condition of households.[2] If this federal legislation advances, consumers in all 50 states would face similar financial hardship.
Protect consumers’ access to affordable credit and urge your lawmakers to oppose S. 381 and H.R. 1944.