WASHINGTON, D.C. — From grocery bills to rent payments, Americans say every dollar matters — and now, there’s growing momentum to rein in what critics call predatory credit card fees.
Estimates suggest consumers are paying billions of dollars each year in late fees and interest. Both parties in Washington are looking to address the issue.
“I’m asking Congress to cap credit card interest rates at 10 percent for one year,” said President Trump on Wednesday at the World Economic Forum in Davos, Switzerland. “This will help millions of Americans save for a home. They have no idea they’re paying 28 percent. They go out there a little late in their payment and they end up losing their house. It’s terrible.”
As President Trump pitches a cap on credit card interest rates, some Democrats in Congress — also cracking down on big banks — are choosing to target late fees, which cost consumers roughly $14 billion annually.
Senate Democrats have introduced the Credit Card Fairness Act, led by Sen. John Fetterman, D-Pa. It would turn a previous Consumer Financial Protection Bureau rule — locking in an $8 cap on late fees — into law. Democrats say it’s a rule that was blocked after a legal challenge from the banking industry.
“Big banks profiteering off people by charging $41 for a single late credit card payment is absolutely wrong,” said Fetterman. “At a time when people are struggling to get by, these late fees are only doing more harm. This legislation will protect hardworking Americans from predatory fees, and I’ll work with anyone to get this over the finish line.”
“Interest rates are the amount of interest you’re going to pay on the balance that you are carrying. Right now, many credit card companies, it’s 20, 25, sometimes even 30%. And that can really spiral out of control for consumers,” said Bobbi Rebell, a certified financial planner and consumer finance expert at CardRates.com. “A late fee is a lot simpler in that it’s usually standardized for the company. But they are trying to impose that on you for a reason- they want you to pay on time… The focus should be on getting consumers educated so that they do pay on time.”
Rebell says the president’s request of a temporary cap on credit card interest rates would likely deliver more relief in the short term than a cap on late fees. However, she urges card owners, especially those carrying a balance, to be cautious.
“The concern is if you are a high-risk consumer and you are not paying your balance and you’re carrying 25%, 30% interest rates, maybe you’re going to get some temporary relief. But what will be the consequence for you? You might not be as incentivized to pay off your balance as quickly and you also might not have credit available to you when you want it the way it is now,” Rebell said. “These are all ultimately negotiations, both from our government and from the business sector. We’re trying to find a happy medium where the businesses can have a healthy business so they can support the consumer. But we also want the consumers to get a break because these rates are really outrageously high.”
According to the U.S. Bureau of Labor Statistics, the Consumer Price Index (CPI) for all items rose 2.7% from December 2024 to December 2025. Pressure is growing for Washington to deliver financial relief for consumers, roughly nine months ahead of the crucial 2026 midterm elections- where the economy will be a major factor in determining who controls Congress.
