Trump promised a cap on credit card interest rates. here’s his chance.
Two senators plan to introduce a bill Tuesday to impose a tight cap on credit card interest rates, reviving a proposal that is sure to draw howls from banks and other lenders.
A lid on credit card rates has been a white whale of sorts for consumer advocates and others for generations, with efforts falling short during the administrations of Presidents George H.W. Bush and Barack Obama. The idea received new life in September when President Donald Trump, then on the campaign trail, said he supported a temporary 10% limit on credit card rates “while working Americans catch up.”
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That exact cap is contained in Tuesday’s legislation to amend the 1968 Truth in Lending Act, proposed by two senators who aren’t typically ideological allies: Bernie Sanders, I-Vt., and Josh Hawley, R-Mo. Both separately participated in earlier attempts to impose a cap.
The average credit card interest rate is now more than 20%, according to Bankrate. The metric has risen over the past decade; at 22.8% in 2023, credit card companies were charging their highest rates since the Federal Reserve began collecting data in 1994.
The new limit would expire in 2031, after Trump’s term. The White House did not respond to a request for comment on whether the administration would back it.
“We cannot continue to allow big banks to rip off Americans by charging outrageously high credit card interest rates,” Sanders said in a statement. Hawley, who has fashioned himself a populist on economist issues, described current interest rates as “exploitative.”
The proposal can be counted on producing a dim response from the banks and the credit card industry.