A 10% cap on credit card interest rates has drawn some bipartisan support in Congress. 

At a moment when families are stretched and costs keep rising, the appeal is easy to understand. But good intentions and good policy are not always the same thing, particularly in credit markets where the consequences of blunt policy tools tend to fall hardest on the borrowers who can least afford it. 

Credit is not an abstraction for most American families. It is the tool that makes financial resilience and economic mobility possible in practice. Credit history is crucial to renting an apartment or getting access to a mobile phone, and eventually to opening the door to a mortgage. 

Credit cards also play a critical role in covering emergency expenses like an unexpected car repair or a medical bill without wiping out savings or turning to a payday lender. For the millions of Americans living paycheck to paycheck, access to responsible credit is often the difference between a setback and a crisis. 

Affordability is not just about the cost of credit. It is about whether credit is available at all. This is where the evidence matters. Over the past decade, lenders have developed a far more sophisticated ability to assess creditworthiness than was possible on a credit score alone. 

With a consumer's permission, bank transaction data can reveal income stability and payment patterns that a score may not capture, especially for younger borrowers, those new to credit, and those rebuilding after a financial setback. When paired with machine-learning, this information can identify lower-risk borrowers whose credit application may have been declined using traditional underwriting. 

A hard cap at 10% puts all of that at risk. When lenders cannot price meaningful differences between borrowers, they stop lending. 

According to an American Bankers Association analysis, a 10% cap would likely cause between 74% and 85% of open accounts to be closed or have credit lines sharply reduced. When mainstream credit disappears, demand does not disappear with it. It moves to payday lenders and other alternatives with far fewer protections and far higher effective costs, making the affordability problem worse, not better. 

The consequences would also be felt with particular force by small business owners and entrepreneurs, for whom access to credit is not just a personal financial concern, but the foundation of their ability to operate and grow. Federal Reserve survey data show that roughly 58% of small businesses rely on credit cards as a financing source. For many owners, especially in the early years before they have the track record that unlocks bank loans or other financing, a credit card is the difference between seizing an opportunity and watching it pass. 

A policy that cuts off that access does not just inconvenience a business owner. It ripples outward — to the workers they employ, the suppliers they pay, and the communities that depend on the economic activity they generate.

The goal of making credit more affordable is right, and it deserves a serious policy response. That means better underwriting, clear standards, and more transparency so consumers and small businesses can compare options and access credit on safer terms. Those steps may be less simple than a rate cap, but they are more likely to expand affordability by preserving access for the people who need it most.