Address Americans Affected by Economic Policies: Amendments to Capitalize Credit-Card Interest Rates

Exploiting people through high interest rates is wrong.

In a world of Wall Street excess, that simple idea now sounds foreign.

But for thousands of years, it was basic fairness.

“Thou shalt not lend upon usury to thy brother,” declares Deuteronomy 23:19.

The Western world took that principle to heart.

From the Roman Empire on, nations enforced usury laws that severely restricted interest rates on loans.

To name just one example, colonial Massachusetts capped interest rates for decades at 6%.

Times have changed. Our leaders forgot why those laws existed in the first place.

They forgot the wisdom of Abraham Lincoln and Theodore Roosevelt — that while workers and capital each have their rights, one should not be privileged above the other.

Instead, they went all in for capital and handed our financial system over to big business.

Now we reap a bitter harvest. Credit-card interest rates are at record levels.

Annual percentage rates have soared, with some going as high as 36%.

The average is 24.45%; that compares with an average of less than 12% a decade ago.

The total amount of credit-card debt is more than $1 trillion — the highest in history.

Delinquent payment rates are at their highest level in a decade.

Compounding the problem, President Joe Biden’s inflationary policies have pushed consumer prices to the stratosphere.

This kicked off a vicious cycle.

And as costs rise, Americans are forced to use their credit cards to cover basic necessities like rent and groceries.

In a flailing attempt to tackle the issue, the Federal Reserve has raised interest rates higher and higher.

Banks passed those costs along to consumers.

American households get the short straw: Not only are they paying more for basic necessities, they’re now paying to clean up the Biden administration’s financial mess.

This burden falls heaviest on the nearly 50% of Americans carrying a credit-card balance, many struggling to make ends meet.

Interest rates this high make it impossible for working people to catch up.

And all the while, the biggest multinational banks pull in record profits.

Of course, individual financial responsibility matters. But life happens.

Just this year, Tyson Foods announced chicken-plant closures in small-town Missouri that will force 2,000 people out of work.

Those workers and their families still need to live.

If they end up carrying a credit-card balance, why are they fair game for corporate plunder?

As a nation, we can do better than that.

Let’s start by capping credit-card APRs at 18%.

By historical standards, that’s quite high.

But it’s the same APR cap that exists for credit cards issued by federally chartered credit unions.

We already have federal laws capping rates for a subset of credit cards, so let’s just expand that framework to cover the sector.

Of course, big banks will try to evade these caps by creating new fees. Those too should be restricted.

Republicans talking about helping working people is a good thing.

But it’s more important for us to get the job done.

Supporting America’s workers and families means tackling the everyday problems they face — not giving handouts to corporations or foreign governments and hoping the benefits will eventually trickle down. 

Old slogans about the magic of the market won’t cut it anymore.

Actually passing a law to cap interest rates is a first step toward a better future — a future rooted in our own tradition.

American workers and families deserve it.

Congress can pass legislation that makes a real difference.

Republicans should step up to take the lead.

Josh Hawley represents Missouri in the US Senate.