Sponsors (2)
The bill lowers credit costs and limits hidden fees to protect consumers—especially low-income cardholders—but increases costs and uncertainty for lenders that may reduce credit availability or raise prices in other areas.
Low-income credit-card holders would pay lower interest because APR on credit-card extensions is capped at 10 percentage points inclusive of finance charges.
Consumers (especially low-income cardholders) would face fewer hidden costs because non-finance fees would be limited to no more than finance charges, preventing fee-based workarounds by creditors.
Consumers who were overcharged could recover interest and fees paid above the cap because the bill allows recovery within two years, providing reimbursement for past overcharges.
Low-income consumers and small businesses could lose access to credit if issuers tighten underwriting or exit markets to avoid legal risk, reducing borrowing options for the most credit-dependent borrowers.
Creditors and card-issuing businesses could face lower revenue and higher compliance costs, which may lead to higher prices elsewhere or reduced product offerings.
Lenders, borrowers, and state governments would face temporary uncertainty about long-term credit pricing and interactions with state law because the bill sunsets in 2031, complicating planning and regulatory clarity.
Based on analysis of 2 sections of legislative text.
Imposes a federal cap on credit-card APR of 10 percentage points, restricts fee-evasion, creates borrower recovery rights, and sunsets on Jan 1, 2031.
Official title: To amend the Truth in Lending Act to cap credit card interest rates at 10 percent.
Introduced March 6, 2025 by Alexandria Ocasio-Cortez · Last progress March 6, 2025
Caps how much credit-card lenders can charge by limiting the annual percentage rate (APR) on credit-card extensions to 10 percentage points and restricts fee practices that try to evade that cap. It allows borrowers (or their representatives) to recover interest and fees paid in violation, makes violations subject to existing consumer remedies, preserves stronger state laws, and sunsets the new federal cap on January 1, 2031.