Sen. Josh Hawley introduces bill Introduced to cap credit card interest rates at 18%

Published: Sep. 13, 2023 at 5:08 PM CDT
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WASHINGTON (Gray DC) - As credit card debt levels soar across the country, there is a new effort in Washington to try to limit the amount of interest credit card companies can charge.

Missouri Senator Josh Hawley (R-MO) introduced a bill on Tuesday that would cap credit card interest rates to 18% APR.

“These credit cards are making huge amounts of money on people who are in distress,” said Sen. Hawley. “People who have had a tough time in today’s economy. And that is a lot of working people in the state of Missouri and all across the country. It’s just common sense. These companies don’t need to make more than 18% profit.”

Americans are now dealing with record credit card high interest rates and carrying $1 trillion in credit card debt according to the Federal Reserve Bank of New York. The average credit card interest rate is now at a record 24.37 percent according to LendingTree.

The bill would also prevent credit card companies from imposing new fees to evade the cap and would add penalties for companies that violate it.

But this is not the first time Congress has tried to introduce a bill like this says Nerdwallet credit card team Senior Writer Melissa Lambarena.

“What we do know is that others have tried to introduce similar legislation and it hasn’t gained much traction. The difference here is that we are at a time where debt is at an all time high and interest rates are really steep. So that is top of mind for consumers,” said Lambarena.

The American Bankers Association has said it would reduce access to credit for some people.

A spokesperson from group said in a statement Tuesday, “Creating a cap on credit card interest rates has been debated and rejected because it would only reduce access to credit for those who need it most. The proposal would simply drive more Americans to less regulated, more costly alternatives and Congress should reject it.”