Bill would cover credit cards of 10%. What it means to you

Despite the Federal Reserve’s recent cuts, credit cards have hovered near record highs. A new bipartisan bill would hood them on a dramatically lower figure, but experts say it may not be a victory for consumers.

Senators Bernie Sanders, I-Vt., And Josh Hawley, R-Mo., introduced a bill This week, it would cover credit cards at a 10% annual percentage rate (APR) for five years. It’s an idea that President Donald Trump was floating at the campaign’s rally in New York in September.

“Capping credit cards to 10%, just as President Trump campaign is a simple way to give meaningful relief to working people,” Hawley said in a statement.

The average April on credit card for January 2025 was 24.26%, According to LendingTree.

Almost half of the credit card holders carry debt from month to month, according to a recent bank rate survey. In 2022, credit card companies charged consumers more than $ 105 billion in interest and more than $ 25 billion in fees, according to a survey of 2023 from The consumer’s financial protection agency.

“We cannot continue to give big banks the opportunity to make huge profits that rip the American people. This legislation will give working families who are struggling to pay their bills with desperate need for financial relief,” Sanders said in a statement.

This is not the first time these senators have suggested the idea of ​​a rate. In 2023 Hawley suggested one 18% rateWhile Sanders suggested an 15% rate cap in 2019. Neither had sufficient support to promote the proposals.

About three -quarters or 77%of the Americans surveyed said they support a ceiling on the interest rates that financial institutions can charge on a credit card, according to a Recent study of lendingtree. But this support is down from 80% in 2022 and 84% in 2019.

The legislation has a long way to go before it could be allowed, and experts say that its fate partially depends on what is happening to inflation and whether Trump continues to support the measure.

“If pricing remains stable, I think it will be much harder to promote this kind of legislation,” said Jaret Seiberg, a policy analyst for TD Cowen.

While a 10% capital may sound appealing, experts say that the difficulties of how it are structured are important, taking into account periodic interest rates, fees and the repayment structure.

“You could have zero interest and still have an incredibly expensive product,” said Chi Chi Wu, a senior lawyer at the National Consumer Law Center.

The proposal also seems to be in violation of Trump -Administration’s interest in Removing Consumer Financial Protection Bureau, she said.

The banking industry is against the idea of ​​a rate cap. Seven financial groups Representing banks and credit unions of all sizes have come together to oppose the measure. They say it will limit consumers’ access to credit and push them into higher prices, less regulated products such as payday loan, which may have an average April of 400%.

“There is no evidence that APR caps make consumers better off or save them money,” said Lindsey Johnson, president and CEO of the Consumer Bankers Association.

There are already a few federal caps on the interest rate. In 2006, Congress adopted Act Act of Military LendingThere was a 36% interest rate on revolving loans to active officials and their families.

Federal credit unions are typically restricted to a maximum of 15% April, but the rate can be increased to protect the security and health of the credit union. The maximum is currently 18% through March 10, 2026.

Bankers say a rate cap is inhibiting lenders and reducing access to credit for consumers at higher risk.

“Providing an all-in-Apr is a deficient tool to measure the true cost of the loan, in order to maintain the lender’s safety and health and ensure that credit access is offered to a wide range of consumers, the banks must price their loan products correspond to A risk to each borrower, ”Johnson said.