Credit Card Cap: Winners and Losers From 10% Interest Rate Limit
Lawmakers are pushing for a cap on credit card interest rates to lower costs—but it could have negative consequences.
Nearly $1.3 trillion in credit card debt is owed by Americans, with lawmakers advocating for a 10 percent cap on interest rates to alleviate the burden. Credit card debt rose by $22 billion in the third quarter of 2026, higher than the previous year. The average credit card interest rate is 22.36 percent. The share of credit card balances that are 90 days late or more fell to 6.87 percent in the third quarter, down from 7.05 percent a year earlier.
President Donald Trump and several lawmakers proposed a 10 percent cap on interest rates, calling the current rates "ripping off" consumers. Democratic Senator Elizabeth Warren is willing to work with Trump on the matter. The Empowering States’ Rights to Protect Consumers Act, co-sponsored by Warren, would allow states to enforce interest rate caps on credit cards and other consumer loans.
Lower interest rates would benefit credit card debt holders, reducing annual interest bills for a household carrying $8,000 from roughly $1,800 to $800. However, lenders would face revenue losses and might respond by raising annual fees, tightening rewards programs, or tightening underwriting, leaving borrowers with fewer options and potentially pushing them toward riskier, higher-cost alternatives.
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