# What the 10 Percent Credit Card Interest Rate Cap Act Actually Does

This bill would cap credit card interest rates at 10 percent annually. Right now, credit card companies can charge whatever interest rate they want—some cards charge 20, 25, or even 30 percent or higher. This bill would make it illegal for them to charge more than 10 percent. The cap would apply to all interest charges combined, meaning credit card companies can't get around the limit by hiding extra costs in fees. If a company tries to charge more than 10 percent through sneaky fees that aren't technically called "interest," those fees would still count toward the 10 percent limit.

If a credit card company violates this rule, they'd face serious consequences. They'd have to give back all the interest and fees they illegally charged you, and you could sue them to recover that money within two years of when they charged it. The bill also allows states to set even stricter limits if they want to protect their residents more than the federal 10 percent cap does.

There's an important catch: this law wouldn't take effect immediately. It would only go into effect on January 1, 2031—giving credit card companies about six years to adjust their business models. This means if the bill passes, you wouldn't see lower interest rates on your credit cards right away. For people currently carrying credit card debt at high interest rates, this wouldn't help them immediately, but it could significantly reduce borrowing costs for future credit card users starting in 2031.