Credit card rate caps will unleash a whirlwind of economic consequences

This article was originally featured in The Hill. By Javier Palomarez

New Op-Ed in The Hill: Why Credit Card Rate Caps Could Devastate Small Businesses

In a newly published op-ed in The Hill, USHBC President & CEO Javier Palomarez outlines the serious economic consequences of imposing a federal 10 percent cap on credit card interest rates.

While rate caps may appear to offer relief to consumers, the reality is far more complex. As Javier explains, restricting access to credit could eliminate or significantly reduce credit lines for millions of Americans almost overnight, removing trillions in purchasing power from the economy and placing extraordinary strain on small businesses.

With more than 80 percent of small business owners relying on personal or business credit cards for daily operations, limiting access to credit would disrupt payroll, inventory, hiring, and expansion plans. At a time when nearly a quarter of small businesses are already operating in survival mode, blunt policy instruments could trigger unintended and far-reaching consequences for working families, entrepreneurs, and the broader economy.

Small businesses generate nearly 70 percent of net new jobs and drive almost half of our nation’s GDP. Protecting access to responsible credit is not a partisan issue, it is an economic necessity.

We encourage our members, partners, and small business advocates to read the full op-ed and join the conversation on how to support affordability without undermining the financial tools entrepreneurs depend on.

Read the full article in The Hill.