A bill to limit the interest rate on credit cards has been introduced in Congress. The banking industry says capping rates would have unintended consequences.

Josh Hawley, Bernie Sanders Propose Capping Credit Card Interest Rates At 10%

Sen. Josh Hawley said he has teamed up with the consummate supporter of every bad economic idea, Sen. Bernie Sanders, to introduce an arbitrary 10% cap on credit card interest rates.

Senators Bernie Sanders and Josh Hawley say they will propose a 10 percent limit on credit card interest rates.

New legislation pointed at capping credit card interest rates at 10% will erase card rewards for most consumers, financial experts told the Washington Examiner. Sens. Bernie Sanders (I-VT) and Josh Hawley (R-MO) introduced the bill on Thursday that would cap credit card interest rates for five years.

Sanders and Hawley’s bill comes after President Donald Trump vowed in the 2024 race to temporarily cap credit card interest rates at 10%.

Factors like your debt-to-income ratio, your income and existing debt all influence the interest rate on your credit card. And consumers who are considered high-risk are approved with a higher interest rate as a way for banks and issuers to compensate for the possibility of default.

If the Hawley–Sanders legislation passes, the government will set a price cap on what credit card companies charge for loaning money. If the companies perceive that the price is too low to offset the risk of loaning to some customers, they'll probably stop offering any credit to those customers.

Sen. Bernie Sanders of Vermont and Sen. Josh Hawley, a Republican from Missouri, introduced legislation to cap credit card interest rates at 10%.