World Business Report Could a cap on credit-card rates really hurt consumers?
Jan 14, 2026
Susan Schmidt, a portfolio manager at Exchange Capital Resources, dives into the implications of President Trump’s proposed 10% cap on credit-card interest rates. She highlights concerns from banks about limited lending and access to credit for vulnerable consumers. The discussion also touches on rising consumer debt in the U.S., driven by essential expenses, and the demand for credit counseling. Schmidt warns that while a cap may help some, it could push risky borrowers toward subprime lending and doesn't address the challenges for those already in default.
AI Snips
Chapters
Transcript
Episode notes
Banks Warn Of Credit Crunch
- US banks warn a 10% temporary cap on credit-card rates could make card lending unprofitable and shrink access to credit.
- That reduction would likely hit higher-risk borrowers and squeeze consumer spending, the banks argue.
A Borrower Living On Credit
- Selina Cooper described using credit cards to cover essentials like bills and business costs after a government shutdown.
- Her three cards carry about $6,000 and high monthly fees make it hard to reduce the balance.
Cards As A Financial Lifeboat
- Americans hold about $1.23 trillion in credit-card debt while average rates sit near 20%, driven by affordability pressures.
- Rising costs for groceries, housing and healthcare push people to use cards as a last-resort lifeline.