AOC, Luna team up to cap credit card interest rates at 10%

• Reps. Alexandria Ocasio-Cortez and Anna Paulina Luna introduced a bill that, if passed, would cap credit card interest rates at 10% nationwide. The bill would allow individuals to sue if they’re charged a higher rate.
• President Trump promised to cut rates during his campaign. Sens. Josh Hawley and Bernie Sanders introduced the same bill in the Senate.
• The average credit card interest rate is 21.47%, according to WalletHub.

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One of President Donald Trump’s biggest supporters and the face of the progressive movement have teamed up in an effort to cut credit card interest rates in half. Reps. Alexandria Ocasio-Cortez, D-N.Y., and Anna Paulina Luna, R-Fla., introduced a bill that, if passed, would cap credit card interest rates at 10% nationwide.

What are lawmakers saying about the legislation?

“For too long, credit card companies have abused working-class Americans with absurd interest rates, trapping them in an almost insurmountable amount of debt,” Luna said in a statement. “We need a fair solution — and that means getting rid of the status quo and putting a reasonable cap on interest rates.”

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“Credit cards with high interest rates regularly trap working people in endless cycles of debt,” Ocasio-Cortez said about the legislation. “At a time when families are struggling to make ends meet, we cannot allow big banks to shake down our communities for profit.”

Credit card interest rates have become a bipartisan cause for concern over the last few years. Trump promised to cut rates in September 2024 while campaigning.

“While working Americans catch up, we’re going to put a temporary cap on credit card interest rates at 10%; we have no choice,” Trump said. “Because they can’t afford to pay off their credit card.”

Sens. Josh Hawley, R-Mo., and Bernie Sanders, I-Vt., introduced the same bill in February.

“When large financial institutions charge over 25% interest on credit cards, they are not engaged in the business of making credit available,” Sanders said. “They are engaged in extortion and loan sharking.”

What is the credit card industry’s response?

The Consumer Bankers Association, which represents credit card companies, said price-setting has been proven to harm Americans.

It said individuals who lose access to bank credit are often forced to use even riskier lending methods like payday loans which can charge and an annual percentage rate of 300% or more.

“Research clearly shows that when politicians, rather than the free market, dictate prices, consumers ultimately pay the price through limited choices outside the well-regulated banking system,” CBA CEO Lindsey Johnson stated.

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What does the bill actually do?

The bill allows individuals to sue credit card companies if they’re charged more than 10% so they can receive a full refund of the difference.

The average credit card interest rate is 21.47%, according to WalletHub. That’s lower than the record 22.8% set in 2023 but nearly double 2013, when the rate was just 12.9%.

In the final months of 2024, Americans held $1.2 trillion in credit card debt.