US Credit Card Interest Rate Cap: Executive Action Could Slash Consumer Debt Costs
The US government is exploring executive action to implement a US credit card interest rate cap. This move could lower costs for millions but risks a credit crunch for low-income borrowers.
Your monthly credit card bill might soon get a lot lighter. The US government is weighing an executive action to cap credit card interest rates, according to a report by Bloomberg News via Reuters. This bold move aims to provide direct relief to households struggling with APRs that have remained stubbornly high even as other rates fluctuate.
Biden Administration Targets Sky-High Interest Rates
With average credit card rates hovering above 20%, the administration is exploring legal pathways to limit what they call 'excessive' interest charges. By pursuing executive action, the White House could potentially bypass a gridlocked Congress, though such a move is certain to face intense legal challenges from the financial sector.
Impact on Wall Street and Credit Availability
Major issuers like JPMorgan Chase, Citigroup, and Capital One are bracing for a potential hit to their bottom lines. Industry lobbyists argue that an artificial US credit card interest rate cap would force lenders to tighten credit standards, making it harder for low-income borrowers to obtain cards at all.
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