Republicans Most Concerned About Government Cap's Perceived Unfairness to "Responsible Payers."

WASHINGTON, D.C. - A Morning Consult survey conducted on behalf of the Consumer Bankers Association (CBA) released today finds growing concerns among hardworking Americans regarding recent calls to temporarily cap credit card interest rates at 10 percent.

CBA President and CEO Lindsey Johnson released the following statement on the survey results:

"The data confirms what hardworking Americans, lawmakers on both sides of the aisle, and subject matter experts already know: a government-imposed cap on credit card interest rates would hurt consumers by drying up access to credit, jeopardizing credit card rewards programs, and threatening the broader economy.

"The data also highlights the deep concerns Republican and Democratic constituents alike have about the negative consequences this proposal - if enacted - would have on Main Streets across America."

Key Findings

As it relates to recent calls to temporarily cap credit card interest rates at 10 percent:

• Six in ten adults believe it is likely that banks will be forced to add new fees and expect a reduction in total credit card approvals.
• Two-thirds of the general population expressed concern that rate caps would hurt those who rely on credit for emergencies and the impact on low-income households.
• Self-identified Republicans were more likely than other respondents to cite being unfairly punished by a rate cap for responsibly paying their credit card bills. Some responses include:
  • "I would not like losing my reward card. I think we pay enough as it is. The government should stay out of it."
  • "I would be upset because it punishes those of us that pay off our bills monthly."
  • "I pay off my credit card in full each month, so interest rates are no consequence to me. I would NOT like having my cash back rewards reduced."
• Republican respondents used increasingly charged or angry language about the proposed cap on credit card interest rates. Some responses include:
  • "[I would feel] angry considering the benefits of a credit card are meant to take care of things like that especially when people are paying their hard earned money for it."
  • "I would be mad because I depend on my credit card and my rewards."
  • "I [would] feel like Ive [sic] been backstabbed and it hurts."

To read a summary of the survey, click HERE.

Background

Interest rate caps harm the very people they're intended to help. Empirical data shows rather than protecting consumers, interest rate caps harm borrowers who have high debt by reducing access to credit, which can increase loan defaults and limit access to emergency credit. When lenders cannot appropriately price risk, they cannot justify lending funds, and the amount of overall credit available in the market drops. Consumers impacted most by rate caps are typically low- and middle-income consumers who may have challenging credit histories and are considered higher risk and must be priced appropriately.

Additionally, there is no evidence that APR caps make consumers better off or save them money. The available evidence confirms that fee and interest rate caps reduce access to credit, especially for those with no or troubled credit history, and force some consumers to take out a larger loan than they need to get a lower APR.

CBA Advocacy

• To read more about the myriad of off-the-shelf choices and tools at their disposal to select a card with the features that meet their unique financial needs, click HERE.
• To read a joint statement in response to recent calls to impose a credit card rate cap at 10 percent, click HERE.
• To read CBA President and CEO Lindsey Johnon's recent commentary on the credit card landscape, click HERE.
• To read what subject matter experts are saying about how credit card interest rate caps harm consumers, click HERE.
• To understand the component part that make up an APR, read a CBA Data Desk HERE.
• To read recent research paper exploring the causes of the rise of credit card APRs, click HERE.
• To read CBA President and CEO Lindsey Johnson's recent op-ed about the perils of credit card interest rate caps and the harm they would have on consumers, click HERE.
• To read what researchers are saying about how interest rate caps would limit consumer choice in the free market, click HERE.
• To learn more about how rate caps hurt the very consumers they're supposed to protect, click HERE.
• To read an editorial from The Wall Street Journal Editorial Board against credit card interest rate caps, click HERE.
• To read our blog post examining the myths and facts of how credit card interest rate caps harm consumers, click HERE.
• Visit WashingtonWalletWatch.com to learn more about how government price controls on credit harms consumers.