Bipartisan bill would cap credit card interest at 10%

A bipartisan bill in Congress proposes capping credit card interest rates at 10%, aiming to provide financial relief for American consumers. Photo courtesy Avery Evans/Unsplash

President Donald Trump promised on the campaign trail to put a 10% limit on interest for credit cards, less than half of what many cards now charge

A new bipartisan bill introduced in Congress on Tuesday would cap the interest rate that credit card companies can charge at 10%.

The bill has bipartisan support from unusual bedfellows: U.S. Sens. Josh Hawley, R-Mo., and Bernie Sanders, I-Vt.

“When large financial institutions charge over 25% 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. This legislation will provide working families struggling to pay their bills with desperately needed financial relief.”

President Donald Trump promised on the campaign trail to put a 10% limit on interest for credit cards, less than half of what many cards now charge.

“President Trump has promised to cap interest rates at 10% to provide temporary and immediate relief for hardworking Americans who are struggling to make ends meet and cannot afford hefty interest payments on top of the skyrocketing costs of mortgages, rent, groceries and gas,” Trump’s campaign said in September of last year.

Americans hold over a trillion dollars in credit card debt. The bill would keep the 10% cap in place for five years.

Backers of the bill say credit card companies continue to hike interest rates to unfair levels. Critics of the bill say lower credit individuals will not be able to get credit cards.

“Working Americans are drowning in record credit card debt while the biggest credit card issuers get richer and richer by hiking their interest rates to the moon,” Hawley said. “It’s not just wrong, it’s exploitative. And it needs to end. Capping credit card interest rates at 10%, just like President Trump campaigned on, is a simple way to provide meaningful relief to working people. Let’s do it.”

This report was first published by The Center Square.