A new report from Unleash Prosperity warns that a proposed federal cap on credit card interest rates could sharply reduce access to credit for tens of millions of Americans and significantly weaken the U.S. economy.
The report finds that a 10 percent cap on credit card annual percentage rates, part of the proposed “10 Percent Credit Card Interest Rate Cap Act,” could restrict credit access for at least 64 million Americans and result in as much as $714 billion in lost gross domestic product due to reduced consumer spending. The legislation was introduced by Sen. Bernie Sanders (I., Vt.).
The legislation would impose a five-year ceiling on credit card Annual Percentage Rate (APRs) and penalize lenders that exceed it, introducing sweeping price controls into a major segment of the consumer financial system.
“Credit cards are a central pillar of the American economy, helping families manage expenses and businesses grow,” Steve Moore, the co-founder of Unleash Prosperity, said. “Imposing a 10 percent cap would pull tens of millions of Americans out of the credit system, reduce spending, and put the economy at real risk of recession.”
The report, titled Interest Rate Caps Would Dramatically Lower Consumer Credit and Risk Recession, argues that interest rate caps would function as constraints on lenders’ ability to price risk, leading to a contraction in available credit across income levels and borrower profiles.
According to Unleash Prosperity’s report, credit cards also serve as a key entry point into the financial system, particularly for consumers building or repairing credit histories. The report warns that limiting pricing flexibility could reduce financial inclusion rather than expand it, particularly for higher-risk borrowers who would be most affected by tightened lending standards.
Unleash Prosperity’s findings point to historical examples of interest rate caps leading to reduced credit availability and broader economic distortions across lending markets. The report also cautions that the projected impacts may be conservative, noting that underlying datasets do not fully account for severe credit contractions experienced during the 2008 financial crisis.
The organization argues that while supporters of rate caps frame the policy as consumer protection, the practical effect would likely be reduced access to credit, tighter lending conditions, and downstream pressure on household spending and economic growth.
Unleash Prosperity is a national nonprofit focused on advancing pro-growth economic policy through research, media engagement, and policy education. The group publishes the Unleash Prosperity Hotline and regularly produces economic reports aimed at policymakers and media audiences.
