Late last year, Americans hit another milestone: total credit card debt reached a record $1.23 trillion, with the average household in hock for $9,326.

Increasingly Americans facing an affordability crisis are using their plastic to pay for basics like food and housing.

And the cost of such credit is skyrocketing — only making the affordability problem worse.

As of August 2025, the Federal Reserve reported the average interest rate on credit card accounts was 22.83%. Some consumers with low credit scores pay nearly 30%.

During his 2024 presidential campaign, Donald Trump announced he would cap credit card rates at 10%.

The move drew cheers from working-class families groaning under massive debt loads — and criticism from some banks.

Most states ban such excessive interest rates charged to consumers under so-called usury laws.

But a small number of states, notably Delaware, have made a racket of giving banks domiciled there almost free rein to charge consumers as much as they want.

Increasingly, there is bipartisan pushback against banks charging excessive rates.

This past year Sens. Josh Hawley, R-Mo., and Bernie Sanders, I-Vt., introduced bipartisan legislation to cap rates at 10% for five years, framing it as immediate relief for working Americans.

Hawley's office called current rates "exploitative" and tied the effort to Trump's campaign promise.

On the House side, Rep. Alexandria Ocasio-Cortez, D-N.Y., joined Rep. Anna Paulina Luna, R-Fla., in introducing similar legislation with a 10% cap.

"For too long, credit card companies have abused working-class Americans with absurd interest rates, trapping them in an almost insurmountable amount of debt," Luna said at the time she proposed the new law. 

Luna has noted that banks can still make enormous profits as they borrow from the Federal Reserve at rates around 4%. She noted that credit card rates have almost doubled in the past decade, giving banks massive windfalls.

But the Bank Policy Institute, representing major banks, argued such a cap would reduce access to credit for the very consumers most likely to revolve balances.

It estimated that as many as two-thirds of "revolvers" could see credit lines curtailed or eliminated, with disproportionate harm to borrowers with imperfect credit histories.

But critics say the excessively high rates put the poorest borrowers in a "debt trap" — making their payments go almost entirely to interest with little going toward principal.

A comprehensive study by Vanderbilt University's Vanderbilt Policy Accelerator found that credit card companies were indeed charging consumers excessively.

The VPA study found a 15% cap would save consumers $48 billion annually and lead to no real reduction in debt available to consumers.

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And a 10% cap would save consumers about $100 billion but reduce some available debt to the public with those having credit scores under 600.

The study found that under these scenarios banks would still make massive profits — but not the excessive windfalls they have been accustomed to.

For example, Capital One, the largest credit card–issuing bank in the U.S., reported net income of $3.2 billion in the third quarter last year, or an annualized rate of more than $12 billion.