A 10% Credit Card Interest Rate Cap Would Close More Than Half of All Open Accounts

More than 100 million cardholders would lose easy access to credit if a proposed 10% interest rate cap on late payments is implemented. More than half of all open credit card accounts would be closed or closed or have their credit lines drastically reduced. This result stems from lenders' risk mitigation strategies to offset the loss of revenue from the proposal. The impact would be most severe for one-third of lower-income American adults with subprime subprime or near-prime credit scores, including younger workers and those rebuilding after financial setbacks. Federal Reserve data shows that 37% of American adults that cannot cover a $400 emergency expense from savings alone. A similar mechanism occurred in Illinois in 2021, when interest rate caps led to a decrease in credit card access for low-credit-rate households by more than one-third.