Affordability is Key But One-Size-Fits-All Rate Caps Harm American Families

“We share the President’s goal of making everyday essentials more affordable for American families and agree hardworking households are already under real financial strain as a result of corporate mega-store price hikes. But, a one-size-fits-all 10% cap risks making things worse by reducing access to credit and limiting choice.”

Date: January 9, 2025
Media Contact: Nick Simpson
Nick@electronicpaymentscoalition.org

WASHINGTON, D.C. – Electronic Payments Coalition Executive Chairman Richard Hunt issued the following statement responding to reports the Administration is considering a 10% rate cap on credit cards for one year:

“We share the President’s goal of making everyday essentials more affordable for American families and agree hardworking households are already under real financial strain as a result of corporate mega-store price hikes. But, a one-size-fits-all 10% cap risks making things worse by reducing access to credit and limiting choice. Americans need credit cards as a well-regulated sources of credit – credit options that also offer cashback rewards families and small businesses use to help offset rising costs at corporate mega-stores.

“A recent study estimates nearly 90% of cardholders would see their access to credit reduced or eliminated altogether if these government price controls were enacted. Respected economists have reiterated this warning and emphasized these caps might sound promising, but are bad policy and create unintended consequences.

“Instead of price controls, we should focus on reining in inflation driven by corporate mega-stores’ continued price hikes.”

NOTE: EPC and the Missouri Bankers Association issued a report finding a 10% rate cap would result in as many as 88% of Missouri cardholders – or anyone with a credit score less than 740 – effectively losing access to credit. The Wall Street Journal’s Editorial Board also opined that legislation from Senators Josh Hawley and Bernie Sanders imposing a 10% credit card rate cap would result in less credit access and former Trump economic advisor Steve Moore warned rate caps would result in millions of lower-income Americans having less access to credit options. Without the well-regulated credit card market, Americans would be forced to turn to lessor unregulated lenders like pawn shops, payday lenders and online lenders. Additionally, national grocery conglomerates admitted during COVID they increased prices greater than inflation.