Biden Should Cap Credit Card Interest Rates, Not Just Late Fees

As part of a push to get rid of “junk” fees, President Joe Biden wants to limit how much consumers owe when they’re late with a credit card payment. Instead of hitting customers with a penalty as high as $41, card issuers would typically only be able to charge a maximum of $8.

For anyone who has had to pay one of those fees, the cap is welcome news. But if the plan goes through, it’s likely banks and other card issuers would look for ways to recoup the loss of an estimated $9 billion from lower late fees. A possible target: interest rates assessed on balances, which is where the industry makes the bulk of its revenue in the first place.