BBC World Service – World Business Report
Could a Cap on Credit-Card Rates Really Hurt Consumers?
BBC World Service – World Business Report
•January 14, 2026•26 min
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BBC World Service – World Business Report•Jan 14, 2026
Why It Matters
Understanding the impact of a credit‑card rate cap is crucial for consumers, policymakers, and lenders as it could reshape borrowing costs and access to credit for the most financially fragile. The discussion is timely amid heightened political debate over financial regulation and broader economic pressures such as rising commodity prices and shifting trade dynamics.
Key Takeaways
- •Banks warn 10% cap could restrict credit for risky borrowers
- •Average credit card rate 20%; many carry $6,500 debt
- •80% of consumers might lose credit access under proposed cap
- •Penalty rates exceed 30%, limiting benefits of 10% cap
- •US consumer debt hits $1.23 trillion, fueling affordability crisis
Pulse Analysis
The Trump administration’s suggestion to cap credit‑card interest at 10 percent for a year has sparked a fierce debate on Wall Street. Executives from JPMorgan, Citigroup and Wells Fargo argue that such a ceiling would make the credit‑card business unprofitable, forcing banks to tighten lending standards and potentially deny credit to high‑risk borrowers. They point to the current average rate of roughly 20 percent and note that roughly 80 percent of consumers could lose access to revolving credit if the cap were imposed. Their warning echoes the short‑lived Carter‑era price controls, which were quickly rescinded.
On the consumer side, the burden is already severe. The average American carries about $6,500 in credit‑card balances, and total household credit‑card debt has climbed to $1.23 trillion. Many borrowers are already paying penalty rates that exceed 30 percent after a missed payment, meaning a 10 percent cap would not apply to them. Former federal employee Selena Cooper illustrates the dilemma: with three cards maxed out, she struggles to meet basic expenses, and a lower rate would not erase the underlying debt. Credit‑counselors report a surge in calls, reflecting an affordability crisis driven by rising grocery, housing and health‑care costs.
Financial markets have already reacted, with major bank stocks slipping 6‑7 percent after the proposal surfaced. Analysts warn that restricting credit could dampen consumer spending, hit retail and travel sectors, and slow GDP growth. While a lower rate would ease repayment for some, the risk of reduced credit availability may push vulnerable borrowers toward sub‑prime lenders, increasing overall financial instability. Policymakers therefore face a trade‑off between immediate relief and preserving the credit pipeline that underpins the broader economy.
Episode Description
President Trump wants to cap credit card interest rates at 10% for a year. But the big banks warn that could limit lending and hit the most vulnerable first.
Also today - why prices for metals like copper and tin are hitting record highs, we'll investigate what's behind the surge.
And despite fresh US tariffs under President Trump — and a volatile global economic backdrop — China posted a record trade surplus of around $1.2 trillion.
Picture:Illustration shows Bank of America, Citi bank and Wells Fargo credit card mockups, Reuters
Show Notes
BBC World Service - World Business Report, Could a cap on credit-card rates really hurt consumers?
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Could a cap on credit-card rates really hurt consumers?
[World Business Report]
President Trump wants to cap credit card interest rates at 10% for a year. But the big banks warn that could limit lending and hit the most vulnerable first.
Show more
President Trump wants to cap credit card interest rates at 10% for a year. But the big banks warn that could limit lending and hit the most vulnerable first.
Also today - why prices for metals like copper and tin are hitting record highs, we'll investigate what's behind the surge.
And despite fresh US tariffs under President Trump — and a volatile global economic backdrop — China posted a record trade surplus of around $1.2 trillion.
Picture:Illustration shows Bank of America, Citi bank and Wells Fargo credit card mockups, Reuters
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14 January 2026
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26 minutes
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