Your card rate isn’t getting cut to 10% any time soon, but one cap you can use already exists.
Your Daily Dad Joke
My sister bet me $100 I couldn’t build a car out of spaghetti.
You should’ve seen her face when I drove pasta.
What’s real about the cap
The statement comes in. You skip past the balance and the minimum and land on that little interest line at the bottom. It’s more than you hoped. Then you hear somebody on the news say credit card rates are going to be capped at 10%, and for a second it sounds like help is on the way.
That’s why I wanted to pass this along.
We’ve seen this before. It’s important to know what’s real and what isn’t, because headlines can paint a misleading picture. Stick with me and I’ll tell you what I see.
You may have seen the headlines this week about a 10% cap on credit card interest. After the election, Senator Elizabeth Warren said she wants to work with President Trump on it, and that Democrats “have the bills ready to go.” The President called for a one-year 10% cap back in January.
So the question is a fair one. Is my rate about to drop?
Not today. Nothing has passed. The Senate bill for a 10% cap, S.381, still shows one step on its record: introduced. PolitiFact rates the cap promise “Stalled” because no 10% bill has even come up in committee. And the banks say a cap would backfire: lenders would close cards or turn people away, mostly people with lower credit scores.
My bet? I don’t think it has a chance in hell of becoming reality. Banks have too much lobbying power. That’s just how it is.
Here’s the part that is real. There’s already a cap on card rates, and most people have never heard of it. Federal credit unions can’t charge more than 18% on credit cards and most of their loans. Their regulator, the NCUA, kept that ceiling at 18% through September 10, 2027.
It isn’t 10%. But if your card is in the mid-20s, 18% is a real difference, and you don’t need Congress for it. You do need to join the credit union and get approved, so it isn’t automatic.
The one thing I’d do. I’d find the interest rate on my latest statement this week. It’s in the section called Interest Charge Calculation, next to the letters APR. Write that number down. If it’s well over 18%, you know two things you didn’t know yesterday: what you’re actually paying, and that a cheaper home for that balance exists. Calling the number on the back of the card to ask for a lower rate costs a few minutes. The worst they can say is no.
Anyway, I wanted you to hear this before the next headline makes it sound like the rate cut is already in the mail.
What rate does your card charge right now? Share it in the comments so we can all learn from it. I read every comment.
If this was important to you, share it with someone you care about.
You don’t have to wait on Washington to make this a little better. Knowing your own number is the start, and that part is already in your hands.
— Steve
Also on the site since yesterday: what I’d check before taking a private student loan settlement offer and what October’s hot inflation report means for CDs, HELOCs and a mortgage rate lock.
A longer video from me: What to Say When a Debt Collector Calls (Don’t Mess This Up!). It’s lesson one of my free class, and the heart of it is one calm sentence: “Can you please send me the validation notice in writing?”
SEE A SCAM? SAY SOMETHING. If one has landed on you or someone you love, tell me at tips@getoutofdebt.org. The ones that can warn other people may show up here. Leave out account numbers and passwords.
If this was important to you, share it with someone you care about. It’s free at yourmoneyactually.com, and I don’t sell the list. The places I actually use for my own money, and what I get out of telling you, are on one page where they’ll always be.
This is what I’m telling friends like you over coffee. But remember, you do you.