AOC wants to cap your credit card interest at 10%. A chart shows how current rates dwarf that amount.
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- Rep. Alexandria Ocasio-Cortez introduced a bill that would cap credit card interest rates at 10%.
- The average annual percentage rate on credit balances has jumped to 21% in 2024 from 12% in 2003.
- More people are falling behind on monthly payments, showing signs of consumer stress.
Americans' credit card debt is at an all-time high. Soaring interest rates on credit cards coupled with other economic factors could make the situation worse.
In March, Representatives Alexandria Ocasio-Cortez and Anna Paulina Luna introduced a bipartisan House bill that aims to cap annual credit card interest rates at 10% a year.
"Credit cards with high interest rates regularly trap working people in endless cycles of debt," Ocasio-Cortez said in a press statement. "At a time when families are struggling to make ends meet, we cannot allow big banks to shake down our communities for profit."
The average annual percentage rate on credit balances has nearly doubled in the past decade to 21% in 2024 from 12% in 2003, per the Consumer Financial Protection Bureau. Credit card interest rates can fluctuate with an individual's credit score, but they are ultimately determined by market conditions.
As credit card interest rates have risen, so has the amount of consumer debt, as well as delinquencies on payments.
The total amount of credit card debt has ballooned to $1.2 trillion in Q4 of 2024 up from $720 billion in the same quarter of 2004, per the Federal Reserve Bank of New York. More people are falling behind on their monthly payments and the number of active credit card users only making the minimum payment on their monthly credit card statement has reached a record high, "showing signs of consumer stress," per the Federal Reserve Bank of Philadelphia's 2024 Q3 report.
President Donald Trump ran on campaign promises last year that he would temporarily cap credit card interest rates at 10%, to allow Americans to "catch up" on their balances, but he hasn't taken executive action or spoken about interest rate caps since entering office.
The bill is now referred to the House Committee on Financial Services, but has yet to be put on the calendar for a vote in the House of Representatives.
Ocasio-Cortez and Luna did not respond to requests for comment.
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