Sen. Bernie Sanders (I-Vt.) announced plans to introduce legislation supporting President-elect Donald Trump‘s proposal to cap credit card interest rates at 10%, as credit card defaults reach their highest levels since the 2008 financial crisis.
What Happened: Major credit card companies saw their stocks decline on Monday, with Visa Inc. V falling 1.05%, Mastercard Inc. MA dropping 1.25%, and American Express Co. AXP declining 1.24%.
“Donald Trump proposed a 10% cap on credit card interest rates. Great idea. Let's see if he supports the legislation that I will introduce to do just that.” Sanders said wrote on X on Monday.
The proposed cap would mark a significant reduction from the current average rate of 21.5%, according to Federal Reserve data. Trump first introduced the idea during a recent campaign rally at Nassau Coliseum, where he told a crowd of 16,000 that rates of 25% to 30% were unacceptable.
The initiative comes as U.S. credit card lenders wrote off $46 billion in seriously delinquent loan balances during the first nine months of 2024, a 50% increase from the previous year, according to BankRegData.
“High-income households are fine, but the bottom third of U.S. consumers are tapped out,” said Mark Zandi, head of Moody’s Analytics. “Their savings rate right now is zero.”
See Also: Bill Ackman Questions Stock Market Closure To Honor Jimmy Carter, Calls It ‘Shutting Down Commerce’
Why It Matters: Industry groups have expressed strong opposition to the proposal. The Consumer Bankers Association warned that government-imposed price controls would particularly harm lower-income Americans, potentially forcing them to turn to riskier alternatives like payday lenders.
Capital One Financial Corp. COF, the nation’s third-largest credit card lender, reported its annualized credit card write-off rate increased to 6.1% in November, up from 5.2% a year ago.
Despite lenders writing off nearly $60 billion in consumer credit card debt over the past year, another $37 billion remains overdue by at least one month.
Odysseas Papadimitriou, head of the consumer credit research firm WalletHub, highlighted that consumer spending power has been weakened. Despite nearly $60 billion in consumer credit card debt being written off in the past year, an additional $37 billion remains overdue by at least one month.
Read Next:
Image Via Unsplash
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
