Source: USA Today
by Dace Potas
“Interest rates aren’t a number just pulled out of nowhere. Higher-risk clients need to pay higher interest rates in order for banks to be willing to take their business. Telling banks they can only charge so much interest will make them more selective in whom they lend to. Trump and other populists imagine that in passing legislation capping interest rates, all other functions of the credit card industry will remain the same, just with a lower rate for consumers. The reality is that if banks cannot offset accepting riskier clientele by charging them higher interest rates, they simply will not expose themselves to the risk that some people provide. This means that low-income Americans or those with shaky credit histories will have no chance at obtaining credit cards.” (01/14/26)