The Simmering Populist Revolt on Credit Cards
Some of the most interesting political questions are ones that cut across partisan lines in unique or unexpected ways. Business owners are more typically thought of as conservative on economic issues, for example, and yet many depend on permissive immigration policies. A devout Christian might be anti-war, anti-gun, in favor of an expanded social safety net, and pro-life. Gun owners are more commonly thought of as being on the political right, and yet many have great respect for nature and environmental conservation (I have sometimes heard these folks be described as “Green Republicans;” here in Maine, we have a lot of these types).
To me, these are not psychological inconsistencies, but rather reflect the nuance and complexity of a mature worldview. I wish more people would be open about their own beliefs that cut across the lines of the traditional political spectrum in unexpected ways. I think it would make for a healthier democracy and a more respectful political discourse.
The Rising Credit Card Consternation
One issue I have been monitoring lately that is making for some strange political bedfellows is the question of credit card interest rates. Long-time Sunday Morning Post readers may recall previous pieces acknowledging how Americans’ collective credit card debt is like a ticking time bomb. Not only is the amount of credit card debt at an all-time high, but credit card interest rates are also at all-time highs, which is quite the worrisome combination. The average credit card interest rate per the Forbes weekly tracking report this past week was just over 25%!
As one might expect with those mathematical inputs, credit card delinquency rates are on the rise; delinquencies rose to a rate of 2.98% in the third quarter of 2025, which is the most recent quarter for which data was available. This delinquency rate was up from a multi-year low of 1.53% in the third quarter of 2021, and up modestly (although closer to on par) from a pre-pandemic low of 2.60% in Q3 of 2019. I suspect when data becomes available for Q4 or 2025 and Q1 of 2026, the credit card delinquency rate will probably have pushed higher.
It’s just hard to get out of debt when interest is accumulating at a rate of 20% or more. That much should be obvious. I’m not here to judge those who accumulate a lot of debt and can’t keep up with it, and it’s not part of the scope of today’s article. What is interesting, however, is the cast of characters stepping up to the plate to take a swing at this simmering issue.
Consider, for example, the President of the United States. In January, President Trump said that he would like to see a one-year cap on credit card interest rates of 10%. “We will no longer let the American Public be ‘ripped off’ by Credit Card Companies,” the President posted on Truth Social.
Allied with the President on this particular topic is none other than Massachusetts senator Elizabeth Warren, a person the President has attacked, criticized, and ridiculed for years. The two apparently had a productive call on the topic and may have identified some significant common ground.
Senator Warren is just one member of Congress calling for action on credit card rates. Another is Senator Bernie Sanders from Vermont, who frequently rails in favor of populist economic politics and against corporate malfeasance, so it is no surprise that he is a supporter here. What is more interesting, in my opinion, is who the co-sponsor is with Senator Sanders on a bill to enact the 10% cap that Trump is supporting: Josh Hawley, a deeply conservative Republican senator from Missouri, who has called high credit card interest rates “exploitative.”
The fact that President Trump and Senators Warren, Sanders, and Hawley can all agree on an issue like this is quite notable. In a weird way, even setting aside the specific details of the proposed credit card cap, it almost gives you a glimmer of hope in this godforsaken political mess the country finds itself in that maybe leaders of vastly different political stripes can still come together.
What the Banks are Saying
Who is not as keen on a credit card cap, however, are the banks and credit card companies. It’s unclear if the Sanders-Hawley bill will get traction, even with the President’s support. But the banks and credit cards companies are certainly opposed. Of note, the American Bankers Association in conjunction with the America’s Credit Unions released a statement saying that the proposed 10% cap would harm the very people it intends to help:
This bill would eliminate access to credit cards for millions of consumers and drive them to sources of credit which are far more costly and less regulated. Many consumers who currently rely on credit cards would be forced to turn elsewhere for short-term financing needs, including pawn shops, auto title lenders, or worse– such as loan sharks, unregulated online lenders, and the black market.
The reasoning here is that a 10% cap would cause banks and other creditors to simply not offer as many credit cards. The interest rate that is offered on cards, the banks would say, is a reflection of risk, and not purely a profit play. Since many credit card borrowers are high-risk, it would be preferable to the banks and credit card companies to simply not offer cards at a 10% rate rather than absorb all of that increased risk of lending money at a rate that is not commensurate with risk.
The further argument is that by restricting credit cards, it would either push consumers into much more detrimental means of borrowing like high-rate payday lending, or it would cause people to pull back on spending altogether, which would have negative ripple effects through the entire economy. The statement further reads:
Research demonstrates that when consumers lose access to credit, they often reduce spending on essentials such as healthcare, education, and food, and are more likely to fall behind on bill, mortgage, and rent payments. Lack of a credit card would also likely reduce their consumption of items like furniture and clothing which not only negatively affects consumers, but also negatively affects the broader economy.
In response to a question on the topic in January, JP Morgan CEO Jamie Dimon said of the 10% cap, “It would be an economic disaster” that would result in a loss of access to credit cards for 80% of Americans. Dimon added, “The people crying the most won’t be the credit card companies, it’ll be the restaurants, the retailers, the travel companies, the schools, the municipalities, because people miss their water payments.”
The banks, credit unions, and credit card companies are all aligned on this point of view, although very few have been willing to speak out individually for fear of incurring the wrath of the President (and, perhaps in many ways, the public).
Funnily enough, Jamie Dimon suggested in jest that the credit card cap could be rolled out on a trial basis in Massachusetts and Vermont, the home states of Senators Warren and Sanders (not sure why he left out Missouri for Senator Hawley…). In response to this quip, Senator Warren doubled down, saying that, yes, in fact, states should be able to decide their own credit card interest limits. She then publicly called for the JP Morgan Chase CEO to support the idea.
What Happens Next
So where does this go from here? Other lawmakers including Speaker of the House Mike Johnson have expressed skepticism over a credit card interest cap. Reasons include an acknowledgement of the bankers’ statement that the proposed limit would actually reduce the availability of much-needed credit to millions of Americans, and the general laissez-faire view that the government should not have that level of control over business activity.
When President Trump brought up the credit card cap idea in January (and declared a January 20th deadline for compliance, by the way), he was largely ignored. I am sure most of the banks hope the idea goes away. With multiple senators supporting the notion, however, time will tell. I personally doubt the measure will get very far, but we are living in strange times, for sure, so I suppose you never know.
The larger context here that is particularly interesting to me is that link between the progressive left (i.e. Warren and Sanders) and the populist right (i.e. Trump and Hawley). It is almost like the traditional political spectrum becomes a circle — when you get to the very far left, you actually connect back to the very far right on some issues.
I’m seeing this in other areas right now, too. Look at the response to aggressive ICE actions in Minnesota, for example. The progressive left is clearly inflamed by what has happened there, but I’m starting to see anger from certain segments of the right, too. Those on the traditional right may not be coming from the perspective of wanting to protect their immigrant neighbors in the way that those on the left may be. Instead, many on the right are instinctively apprehensive of paramilitary troops patrolling the streets who are detaining people (including some lawful U.S. citizens) and entering people’s homes without a warrant. These images are just starting to roil some on the right the way those on the left have been feeling (although for different reasons, perhaps), creating the same “political circle” phenomenon that is evident on the much different issue of credit card interest rates.
I think it’s worth watching how many political issues over the next year or two play out through this lens of the populist wings of both of the traditional political parties coming together in unexpected ways. In its most optimistic light, this may be a source of hope for our politics — that maybe things are not so far gone that we can’t find common ground.
In a more cautionary way, however, when economic and political conditions are such that populist anger can bubble up and find unifying strength from many different points in the political sphere, history shows that this is often the kindling of revolutionary fervor. Some would say, yes, that is the point. But as I wrote about recently with regard to what is happening in Iran right now, revolutionary fervor is rarely calm and not often predictable, to say the least. Fair, it may be a stretch to say that calls for a 10% cap on credit card interest rates is the stuff of revolutions, but even large storms start with tiny raindrops, and a unifying issue between the populist left and right is something to keep tabs on.
Ben Sprague lives and works in Bangor, Maine as a Senior V.P./Commercial Lending Officer for Damariscotta-based First National Bank. He previously worked as an investment advisor and graduated from Harvard University in 2006. Ben can be reached at ben.sprague@thefirst.com or bsprague1@gmail.com. Thoughts and opinions here do not represent First National Bank.
I often find it’s possible to understand positions of politicians by examining their past. Trump was debanked by JP Morgan after the attack by his supporters on the capital. It’s retribution for Trump.
Senator Harley went to a Jesuit prep school where usury may have been taught as a sin. His original bill began with a cap of 18% but he joined with Sanders at 10%, probably assuming a compromise somewhere in between might be realized. His father was a banker and at one point was a credit manager. He may have seen many people ruined by excessive credit.
I don’t have any direct knowledge of exactly who holds the highest credit debt, but I would suspect that for those who use credit cards strictly as a convenience and pay off their credit charges each month, they do not care how high the interest rates are. The banks may have to make up for what they don’t make on interest charges from those people by charging the poor people who need to use credit the higher interest rates. The poor get poorer.
Ben,
Surely the rate should be tailored to the assessed risk of default rather than to penalise all those who want the convenience of a card. A common rate of 25% looks like gouging to me.