Credit Card Interest Rates Capped at 10% Under New Bill: Protections Expire in 2031

The "10 Percent Credit Card Interest Rate Cap Act" aims to put a hard limit on how much interest credit card companies can charge. Instead of letting rates climb as high as they want, this bill caps them at 10%, including all those extra finance charges.

Interest Rate Lockdown

The core of the bill is pretty straightforward: no more sky-high interest rates. The bill sets a 10% ceiling, and that includes all finance charges. It also limits any additional fees, keeping them from exceeding the total amount of finance charges you've already been hit with. This could mean a big change for folks carrying a balance month-to-month, potentially saving them a chunk of change.

For instance, if you're paying 20% interest now, this bill could cut that in half. That's real money back in your pocket that you could use for groceries, rent, or, you know, actually paying down the principal on your debt. But here's the kicker: if a credit card company tries to sneak in higher rates or excessive fees, they forfeit all the interest on that debt. (SEC. 2)

Legal Muscle for Consumers

If you do get overcharged, the bill gives you some serious backup. You've got a two-year window from the last overpayment to take legal action and recover all the interest, finance charges, and fees you paid. Think of it as a built-in protection against predatory lending practices. (SEC. 2)

States Can Go Further and Temporary Measures

If your state wants to get even tougher on credit card companies, this bill lets them. It sets a federal baseline, but states can enact stricter consumer protections. So, depending on where you live, you might see even lower caps or tighter regulations. (SEC. 2)

It is important to note that the protections in this bill aren't permanent. They're set to expire on January 1, 2031. Basically, it's like a trial run to see how this cap works out. This means that in a few years, lawmakers will have to revisit this issue and decide whether to extend the cap, tweak it, or let it disappear altogether. (SEC. 2)