In the United States Senate, there’s a proposal to amend the Truth in Lending Act, setting a cap on all credit card interest rates, including fees and charges, at 10 percent. While this may sound appealing to individuals dealing with significant credit card debt, the legislation, supported by figures such as Bernie Sanders (I-VT), could potentially lead to more negative outcomes than positive ones. R Street’s Caroline Melear offers an insightful perspective:

Regulation often results in unintended consequences, especially in financial services and lending, frequently impacting the very individuals it intends to assist. Similar regulatory measures in the past indicate that both the CCCA and credit card interest rate caps can lead to various negative side effects. Primarily, consumers may suffer when government interventions limit consumer options and access to credit through bureaucratic controls instead of trusting free market dynamics. It would be a misstep for Congress to permit these amendments to compromise an otherwise robust bill.

As of this writing, the average APR on a credit card is 28.67 percent.