- Representative Alexandria Ocasio-Cortez presented a bill that ceased interest rates of the credit card to 10%.
- The average annual percentage rate on credit sales increased to 21% in 2024, compared to 12% in 2003.
- More and more people are behind monthly payments, showing signs of consumer stress.
The debt of the American credit card is at a record level. The outbreak of interest rates on credit cards associated with other economic factors could worsen the situation.
In March, Alexandria Ocasio-Cortez and Anna Paulina Luna representatives presented a bipartite bill which aims to cap the annual credit card interest rates per year per year.
“Credit cards with high interest rates regularly imprison workers in endless debt cycles,” Ocasio-Cortez said in a press release. “At a time when families find it difficult to join both ends, we cannot allow large banks to shake our communities for lucrative.”
The average annual percentage rate on credit sales has almost doubled in the last decade to 21% in 2024, against 12% in 2003, according to the Consumer Financial Protection Bureau. The interest rates of the credit card can fluctuate with an individual’s credit rating, but they are finally determined by market conditions.
As interest rates of the credit card have increased, the amount of consumers’ debt, as well as offenders on payments.
The total amount of credit card debt reached $ 1.2 billion in the fourth quarter of 2024 against $ 720 billion in the same quarter of 2004, according to the Federal Reserve Bank of New York. More and more people are late on their monthly payments and the number of active credit cards users making only the minimum payment on their monthly declaration of credit card has reached a record, “showing signs of consumer stress”, according to the report of the Federal Reserve Bank of Philadelphia.
President Donald Trump led campaign promises last year that he temporarily caps the interest rates of credit cards at 10%, to allow Americans to “catch up” their sales, but he has not taken executive measures or talked about interest rate ceilings since his entry into office.
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The bill is now referred to the committee of the Chamber of Financial Services, but has not yet been put on the calendar for a vote in the House of Representatives.
Ocasio-Cortez and Luna did not respond to requests for comments.
Do you have a story to share on being offender on a student loan or a credit card payment? Contact this journalist by email to jdeng@businessinsider.com.
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