Interest rates on credit cards have been unusually high for a while and have become an occasional target of politicians. In 2020, during Kamala Harris' first presidential campaign, she proposed forbidding credit card companies from charging interest altogether during the pandemic. In September this year, during a campaign rally in New York, Donald Trump proposed capping credit card interest rates at 10 percent. Others from Josh Hawley to Bernie Sanders have also taken up the cause.
Lost in these proposals are millions of Americans who may lose their credit card overnight—not because they mismanaged their finances, but because a new policy made it unprofitable for lenders to offer credit. Many borrowers, even those with good credit scores, could see their accounts terminated under an interest rate cap, leaving them scrambling for alternatives in a society that often requires a credit card to function.
