Connect with us

Personal Finance

Bill would cap credit card interest rates at 10%. What it means for you

Published

2 years ago

on

Freshsplash | E+ | Getty Images

Despite the Federal Reserve‘s recent cuts, credit card interest rates have been hovering near record highs. A new bipartisan bill would cap them at a dramatically lower figure, but experts say it may not be a win for consumers.

Senators Bernie Sanders, I-Vt., and Josh Hawley, R-Mo., introduced a bill this week that would cap credit card interest rates at a 10% annual percentage rate (APR) for five years. It’s an idea President Donald Trump floated at campaign rally in New York in September. 

“Capping credit card interest rates at 10%, just like President Trump campaigned on, is a simple way to provide meaningful relief to working people,” Hawley said in a statement. 

More from Your Money:

Here’s a look at more stories on how to manage, grow and protect your money for the years ahead.

The average APR on credit cards for January 2025 was 24.26%, according to LendingTree.

Almost half of credit card holders carry debt from month to month, according to a recent survey by Bankrate. In 2022, credit card companies charged consumers more than $105 billion in interest and more than $25 billion in fees, according to a 2023 study by the Consumer Financial Protection Bureau. 

“We cannot continue to allow big banks to make huge profits ripping off the American people. This legislation will provide working families struggling to pay their bills with desperately needed financial relief,” Sanders said in a statement.

Limiting credit card interest rates is not a new idea

This isn’t the first time these senators have proposed the idea of a rate cap. In 2023, Hawley proposed an 18% rate cap, while Sanders proposed a 15% rate cap in 2019. Neither had adequate support to advance the proposals.  

Around three-quarters, or 77%, of Americans surveyed said they support a cap on the interest rates financial institutions can charge on a credit card, according to a recent survey by LendingTree. But that support is down from 80% in 2022, and 84% in 2019. 

The legislation has a long way to go before it could become law, and experts say its fate may depend in part on what happens with inflation, and whether Trump continues to support the measure. 

“If pricing stays stable, I think it’s going to be much tougher to advance this kind of legislation,” said Jaret Seiberg, a policy analyst for TD Cowen.

Fees, rate structure may still make credit expensive

While a 10% rate cap may sound appealing, experts say the intricacies of how it is structured are important, with consideration for periodic interest rates, fees and the repayment structure.

“You could have zero interest and still have an incredibly expensive product,” said Chi Chi Wu, a senior attorney at the National Consumer Law Center.

The proposal also seems at odds with the Trump administration’s interest in eliminating the Consumer Financial Protection Bureau, she said.

“If policy makers want to show that they actually care about protecting consumers’ wallets and keeping them from being abused by high-cost credit, they would make sure we have a strong Consumer Financial Protection Bureau,” Wu said.

Rate caps could limit access to credit

The banking industry opposes the idea of a rate cap. Seven financial groups representing banks and credit unions of all sizes have joined forces to oppose the measure. They say it will limit consumers’ access to credit and push them into higher-priced, less-regulated products like payday loans, which can have an average APR of 400%. 

“There’s no evidence that APR caps make consumers better off or save them money,” said Lindsey Johnson, president and CEO of the Consumer Bankers Association. 

There are already a few federal caps on interest rates. In 2006, Congress passed the Military Lending Act, which put a 36% interest cap on revolving loans for active duty service members and their families.

Federal credit unions are typically restricted to a 15% APR maximum, but the rate can be increased to protect the safety and soundness of the credit union. The maximum is currently 18% through March 10, 2026.

Banks blame high credit card rates on regulation that's unlikely to arrive

Bankers say a rate cap inhibits lenders and reduces access to credit for higher-risk consumers. 

“Providing an all-in APR is a flawed tool for measuring the true cost of the loan, because to maintain the safety and soundness of the lender and ensure that credit availability is offered to a broad range of consumers, banks have to price their loan products commensurate with a risk for each borrower,” Johnson said. 

New bill may not apply to existing debt

For consumers who are already carrying debt, this proposal may not be the lifeline it appears. 

“If you already have a lot of debt, this legislation probably doesn’t help you,” said Seiberg.

That’s because the interest rate cap wouldn’t be applied retroactively, he said: “It’s likely to only be on new purchases.” 

Related Topics:
Continue Reading

Personal Finance

$20,000 Caution Bond Requirement for US Visa Applications imposed on 50 Countries

Published

6 days ago

on

August 8, 2026

By

The United States Department of State has officially implemented a revised visa policy introducing a mandatory posting requirement for caution payments of up to $20,000 on select foreign travel applications. Under the updated regulatory framework, consular officials are authorized to require temporary nonimmigrant visa applicants from targeted foreign countries to post a refundable financial bond of $20,000 as a condition for visa issuance. The policy mechanism is designed to address diplomatic concerns regarding high overstay rates among temporary visitor, business, and educational visa categories.

The caution bond pilot program applies selectively to foreign nationals from designated countries whose diplomatic entities record historical visa overstay rates exceeding established federal thresholds. Under administrative guidelines published by the State Department, the full financial deposit is posted directly to a dedicated federal escrow account prior to final visa issuance. The entire caution payment is automatically refunded to the applicant upon verified proof of timely departure from the United States in strict compliance with the authorized duration of stay. Conversely, failure to depart within the legal timeframe results in full forfeiture of the posted financial bond to the United States government.

Diplomatic representatives and travel policy experts have expressed varying perspectives regarding the operational implementation of the caution bond system. Administration officials emphasize that the measure serves as an effective, market-based incentive to enforce international travel compliance and preserve domestic immigration security standards. However, international trade organizations and foreign diplomatic missions have raised concerns regarding the financial burden imposed on legitimate business travelers, foreign students, and commercial partners from developing nations.

The United States finalized the rule to make the temporary visa bond program permanent, taking effect on August 3, 2026. The updated permanent regulation replaces the prior 12-month pilot, eliminates the lowest $5,000 tier, and raises the maximum required bond amount to $20,000 for specific B-1/B-2 business and tourist visa applicants.

Here is the list of the 50 countries on the list as o August 3, 2026

African Nations (31 Countries)

  • Algeria
  • Angola
  • Benin
  • Botswana
  • Burundi
  • Cabo Verde (Cape Verde)
  • Central African Republic
  • Côte d’Ivoire (Ivory Coast)
  • Djibouti
  • Ethiopia
  • Gabon
  • The Gambia
  • Ghana
  • Guinea
  • Guinea-Bissau
  • Lesotho
  • Malawi
  • Mauritania
  • Mauritius
  • Mozambique
  • Namibia
  • Nigeria
  • São Tomé and Príncipe
  • Senegal
  • Seychelles
  • Tanzania
  • Togo
  • Tunisia
  • Uganda
  • Zambia
  • Zimbabwe

Asian & Eastern European Nations (11 Countries)

  • Bangladesh
  • Bhutan
  • Cambodia
  • Georgia
  • Kyrgyzstan
  • Mongolia
  • Nepal
  • Papua New Guinea
  • Tajikistan
  • Turkmenistan
  • Uzbekistan

Caribbean & Latin American Nations (5 Countries)

  • Antigua and Barbuda
  • Cuba
  • Dominica
  • Grenada
  • Venezuela

Oceanian Nations (3 Countries)

  • Fiji
  • Tonga
  • Vanuatu

Continue Reading

Personal Finance

Next-Generation Retirement Planning: Managing Longevity Risk and Variable Income Streams

Published

1 week ago

on

August 7, 2026

By

Retirement planning strategies are evolving in 2026 to address increased life expectancies, shifting dynamic market conditions, and the transition away from traditional defined-benefit pensions. Individual investors and financial advisors are abandoning rigid retirement models in favor of flexible, multi-asset strategies designed to mitigate longevity risk and preserve purchasing power over multi-decade retirement horizons.

Mitigating Longevity Risk with Dynamic Asset Allocation
As average life expectancies extend past eighty-five years, one of the primary financial risks facing retirees is outliving their accumulated wealth. Traditional fixed income allocations—such as the standard 60/40 equity-to-bond portfolio—are being reevaluated to ensure portfolios generate sufficient capital growth alongside reliable income.

Financial planners recommend maintaining a meaningful equity allocation throughout retirement to offset long-term inflation erosion. High-dividend equity funds, global real estate investment trusts (REITs), and inflation-indexed Treasuries are combined to create diversified portfolios that deliver both growth and income stability.

The Transition to Dynamic Withdrawal Strategies
The classic “4% safe withdrawal rule” is increasingly replaced by dynamic withdrawal strategies that adapt annually based on market performance. Under a dynamic withdrawal framework, retirees adjust their annual distribution rates within pre-set caps and floors:
– Market Upside: During strong market returns, retirees can increase discretionary spending or fund family legacy gifts.
– Market Downturns: During market pullbacks, spending distributions are temporarily reduced to prevent sequence-of-returns risk and preserve core investment principal.

Guaranteed Lifetime Income Options and Deferred Annuities
To establish a guaranteed baseline for essential living expenses, individuals are incorporating modern fixed-indexed and deferred longevity annuities into their broader retirement architectures. Modern annuity structures offer competitive return caps, transparent fee schedules, and inflation-adjustment options.

By funding essential expenses—such as housing, healthcare, and insurance—with guaranteed income streams from Social Security, pensions, and annuities, retirees can manage discretionary investment portfolios with greater flexibility and lower emotional stress during market volatility.

Actionable Steps for Future Retirees
1. Calculate Baseline Retirement Expenses: Determine fixed living costs and map guaranteed income sources to cover essential expenditures.
2. Adopt Flexible Withdrawal Rules: Implement dynamic spending rules to protect investment principal against market downturns.
3. Incorporate Inflation-Protected Assets: Maintain exposure to dividend-growing equities and inflation-indexed bonds to safeguard long-term purchasing power.

Continue Reading

Personal Finance

Building Generational Wealth: Family Governance, Estate Tax Optimization, and Asset Protection

Published

2 weeks ago

on

August 1, 2026

By

As the largest intergenerational transfer of wealth in history accelerates, high-net-worth families, entrepreneurs, and individual investors are placing heightened emphasis on comprehensive estate planning, family governance, and asset protection. Preserving capital across generations requires a balanced approach combining tax-efficient legal structures with open family communication and financial literacy education.

Optimizing Estate Tax Exemptions and Trust Structures
With potential modifications to federal estate tax exemption thresholds on the horizon, proactive estate planning is essential for high-net-worth households. Estate planning attorneys and wealth advisors are establishing multi-generational trust structures to transfer wealth efficiently while minimizing estate and gift tax exposure.

Popular structural strategies include:
– Irrevocable Life Insurance Trusts (ILITs): Utilizing life insurance proceeds to provide liquidity for estate tax obligations without expanding the taxable estate.
– Grantor Retained Annuity Trusts (GRATs): Transferring rapidly appreciating assets to beneficiaries with minimal gift tax consequences.
– Dynasty Trusts: Preserving wealth across multiple generations while providing long-term asset protection from creditor claims and legal liabilities.

Establishing Family Governance and Financial Education
Legal and financial structures alone cannot guarantee long-term wealth preservation without effective family governance. Financial advisors report that a significant percentage of multi-generational wealth dissipation stems from lack of communication and inadequate financial preparation among heir generations.

Families are establishing formal family governance frameworks, including periodic family meetings, written mission statements, and structured philanthropic foundations. Involving younger family members in charitable grant-making and investment discussions fosters financial stewardship and prepares heirs to manage family assets responsibly.

Digital Asset Custody and Legacy Planning
In today’s modern economy, estate planning must extend beyond physical real estate and traditional brokerage accounts to encompass digital assets. Comprehensive estate plans now include detailed inventories and legal access protocols for corporate domain names, intellectual property, digital media rights, and cryptocurrency holdings.

Fiduciaries and estate executors should be provided with secure, encrypted access mechanisms and clear legal authority to manage and transfer digital holdings in accordance with the owner’s estate directions.

Practical Steps for Legacy Planning
1. Review and Update Estate Documents: Ensure wills, revocable trusts, and power-of-attorney designations accurately reflect current family structures.
2. Establish Structured Trusts: Utilize irrevocable trusts to protect assets from creditors and minimize future estate tax liabilities.
3. Create a Digital Estate Inventory: Document access protocols and legal permissions for all online accounts, intellectual property, and digital assets.

Continue Reading

Trending