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Rate Cap Reality Check

A proposed 10% federal interest rate cap for credit cards would cut off credit for millions of Americans.

A proposal in Congress to cap credit card interest rates at 10% might sound appealing at first, but a closer look reveals the damage it could do to American consumers and the U.S. economy.

An ABA study using data from credit card issuers representing 75% of the market shows that if the proposal was enacted, 74%–85% of credit card accounts would be closed or sharply reduced, potentially leaving 159 million Americans unable to use their cards—including many with good or excellent credit. The credit disruption would be devastating and cause the economy to slow as consumer spending pulls back.

Tell your lawmakers: oppose the 10% credit card interest rate cap.

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Credit Crunch in all 50 States:

Read the analysis to see how a 10% cap would affect credit card holders in your state.


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Wide Range of Voices Reject Rate Cap

Bloomberg Editorial Board

The lesson is the same whenever and wherever price caps have been used: They don’t work. So long as sellers are competing for business, as they usually are, price controls suppress supply and make everybody worse off. 

— Bloomberg Editorial Board, 1.8.2026

Gary Galles

Professor of Economics at Pepperdine University

Framed as immediate relief, the interest rate cap risks producing the opposite result: reduced credit availability for those who need flexibility most, coupled with the dismantling of a rewards system that stretches household dollars across income levels.

— California Business Journal, 2.11.2026

Chip Lupo

Writer and analyst at WalletHub

You would have to have almost flawless credit to qualify for a 10% interest rate and that would shut a lot of consumers out of the market.

— The Center Square, 2.10.26

Ted Rossman

Bankrate Senior Industry Analyst

This proposal sounds a lot better than it really is. There are major unintended consequences. For example, if credit card issuers can charge a maximum of 10%, they're likely to stop lending to millions of Americans, especially those with lower incomes and lower credit scores. If their access to credit cards goes away, what are they going to turn to instead — a payday loan with a 400% APR?

— Bankrate, 2.10.26

U.S. Hispanic Business Council

A 10% credit card interest cap sounds like a good idea. But it’s not a discount, it’s a delete button…

— U.S. Hispanic Business Council, X, 2.5.26

Economist Stephen Moore

In other words, access to credit has been almost fully democratized. Everyone is using them. They are one of most popular and useful consumer products of all time.

– Committee to Unleash Prosperity, 11.04.2025

Andrew Gins

Americans for Tax Reform

Over two-thirds of the American economy is comprised of consumer spending…Rate caps do not alleviate the cost pressures that lead to high prices, they reduce credit availability and remove a key financial tool households use to manage the cost of living.

– Americans for Tax Reform, 1.23.2026

Alex Kilander, Andrew Fung, and Sophia Lu

Progressive Policy Institute

A rate cap would dramatically reduce access to credit for the very people it aims to protect, just as the economy teeters on the precipice of a recession. By significantly limiting their ability to qualify for and use credit, it would even cause many consumers to turn to predatory alternatives such as payday lenders.

– Progressive Policy Institute, 5.12.2025

Hispanic Leadership Fund

According to Federal Reserve data, 37 percent of adults are unable to cover a $400 emergency expense with cash or its equivalent. Among those who can manage the expense, the most common solution is to use a credit card. Only 55 percent of adults have enough emergency savings to cover three months of expenses. For low- and moderate-income households, credit access often fills the gap when unexpected costs arise. Interest rate caps disrupt that access.

– Hispanic Leadership Fund, 1.15.2026

Washington Post

But the policy would make life less affordable for people who could no longer access credit. For starters, compliance would be impossible. There is simply no way to offer short-term, unsecured credit to the vast majority of people at interest rates as low as 10 percent. Interest rates reflect the risk that lenders take on when making a loan. Higher risk means higher rates.

– Washington Post, 1.13.2026

Former Senator Pat Toomey

This is an old idea, and it’s a very bad idea ... It seems like it’s a way to be able to say, ‘Look what I’m doing about affordability. I’m making your credit cards more affordable.’ But it’s not going to work. What it’s going to result in is people having less access to credit, period.

– John Towfighi, CNN, 1.16.2026

William Stern

Cardiff Founder

People forget that for Main Street, the business credit card is the working capital loan. A plumber or a contractor lives on that float to buy materials. If this cap goes through, issuers are going to slash credit limits overnight to protect their downside. A business owner relying on a $20,000 limit might wake up to find it cut to $5,000. It’s going to pull the rug out from under millions of small businesses that rely on that liquidity to keep the doors open. 

– Tobi Opeyemi Amure, The Street, 1.15.2026

Adam Levitin

Georgetown Law Professor

For most people, it will result in disruption to their personal finances, a loss of credit access, and a need to turn to other, less reputable and less convenient sources of credit. It’s a loser of an idea.

– Credit Slips, 1.12.2026

Tell your lawmakers: oppose the 10% credit card interest rate cap.

Protect consumers’ access to credit.

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