A 10% Credit Card Interest Rate Cap Would Shrink Credit Access for 100 Million Americans

More than half of all open credit card accounts in the U.S. would be closed or have their credit lines drastically reduced if a 10% interest rate cap were imposed. This would affect more than 100 million cardholders, according to a recent analysis covering roughly 75% of the U.S. credit card market. The proposed cap, intended to make credit more affordable, would instead shrink access to credit for millions of Americans.

One-third of lower-income Americans with sub-prime or near-prime credit scores would be disproportionately impacted. These individuals often rely on credit cards to cover emergency expenses like car repairs, medical bills, or groceries. The Federal Reserve reports that 37% of American adults cannot cover a $400 emergency expense from savings alone. For them, a credit card is not a luxury—it is a financial safety net.

When Illinois imposed a similar interest rate cap in 2021, access to credit cards for low-credit households fell by more than one-third. Even a proposed compromise—capping rates at 15% to 20%—would still result in millions of families losing access to credit or facing lower credit limits, especially as interest rates have risen in recent months.

The analysis finds that a 10% cap would not lower costs for consumers. Instead, it would reduce the incentive for credit card companies to maintain open accounts for high-risk or high-cost borrowers, further limiting access for those who need it most.