Sen. Bernie Sanders (I-Vt.) says he will introduce legislation that puts a cap on interest rates for credit cards, a proposal President-elect Donald Trump previously floated to voters on the campaign trail.
Sanders called on Trump to back his legislation.
“During the recent campaign, Donald Trump proposed a 10 percent cap on credit card interest rates. Great idea,” Sanders wrote in a Monday post on X. “Let’s see if he supports the legislation that I will introduce to do just that.”
Trump on the campaign trail pitched the idea of placing a temporary limit of 10 percent on credit card interest rates in order to ease Americans’ debt.
According to a J.D. Power survey released last month, the average interest rate for a U.S. credit card holder is 15.6 percent.
“And while working Americans catch up, we’re going to put a temporary cap on credit card interest rates at 10 percent,” Trump told voters during a September rally in Savannah, Georgia.
Trump often campaigned on policies that would reduce high borrowing costs and lighten the financial burden on American households during the 2024 presidential race.
But opponents remain skeptical of his proposal.
Higher interest rates cover some of banks’ risk exposure and also pay for credit card perks. If Sander’s initiative passes, issuers would likely offer credit cards to fewer risky customers and eliminate some of those fringe benefits, according to the American Bankers Association.
“Interest rate cap legislation would reduce access to credit for millions of consumers, particularly subprime borrowers who rely on affordable small dollar loans, credit cards, and other bank products for short-term financing needs and discourage development of innovative products designed for the under-served market,” the organization wrote in a statement.
Sanders, along with Rep. Alexandria Ocasio-Cortez (D-N.Y), introduced similar legislation back in 2019. Their proposal put the cap at 15 percent, a move that they said would help protect consumers from the “greed” of credit card and banking industries.
Ocasio-Cortez herself called the idea a bold proposal.
“It’s radical, which I always love, and we’re keeping more coins in your pocket, which I also love,” she wrote in a May 2019 post on X.
Some analysts believe there needs to be a happy medium between the interests of credit card issuers and the average U.S. consumer.
“This is a tough marketplace for card issuers to navigate, however, because even though overall credit card customer satisfaction scores are largely flat, the customer base has really become bifurcated into one subset that is feeling squeezed by economic pressures and one that is not,” John Cabell, managing director of payments intelligence at J.D. Power, said in a statement. “Card issuers need to be able to offer options that resonate and deliver value for both segments.”
Sanders’ praise of Trump’s plan to cap interest rates on credit cards may come as a surprise to many, given his reputation as a progressive leftist senator. However, asking for Trump’s backing on his new legislation may not be as shocking because Sanders has focused much of his Congressional work on shrinking the gap between middle-class Americans and the wealthy, even accusing the Democrats’ of abandoning working-class Americans after the latest election.