Senators Sanders and Hawley Propose Legislation to Limit Credit Card Interest Rates to 10%
WASHINGTON – On Tuesday, Senators Bernie Sanders, an Independent from Vermont, and Josh Hawley, a Republican from Missouri, put forward a bill aimed at capping credit card interest rates at 10%. This unusual partnership highlights a rare agreement between the two politicians.
Credit card interest rates are the charges that card issuers apply when consumers fail to pay their balances in full by the due date. As reported by Bankrate, the typical interest rate for credit cards exceeds 20%.
The proposal from Sanders and Hawley follows a pledge made by former President Donald Trump during the 2024 election campaign to limit credit card interest rates to 10% on a temporary basis.
Sanders commented, “When major financial institutions impose interest rates over 25 percent on credit cards, they are not providing access to credit. Instead, they engage in practices akin to extortion and predatory lending. We must not allow large banks to continue profiting by taking advantage of Americans.”
Hawley emphasized that the bill represents “a straightforward approach to deliver significant relief to working individuals.”
As outlined in a press release, the proposed legislation would remain in effect for five years.
However, the legislation is expected to draw criticism from lobbyists representing the banking and credit card sectors. The American Financial Services Association, which represents the consumer credit industry nationally, stated in September that imposing rate caps would be “impractical” and might “actually hurt the very consumers that policymakers seek to assist by restricting access to the types of credit” that many Americans rely upon.
They added, “We are fully in favor of consumer-friendly policies that enhance consumers’ choices and financial flexibility…However, implementing rate caps on credit products is not the answer that American consumers require.”
The amount of credit card debt for Americans has consistently risen each year, with the total credit card balance reaching $1.17 trillion in the third quarter of 2024.
