Price controls have a long and well-documented history of failure, yet policymakers continue to impose them with predictable results. President Donald Trump, Senators Bernie Sanders, and Josh Hawley propose a national cap on credit card interest rates, setting a hard limit at 10 percent. This policy, which appears on the surface to be a populist win for consumers, will ultimately harm the very people it claims to protect. Restricting the ability of financial institutions to price credit appropriately does not make borrowing cheaper. It makes credit more challenging to access, shifting costs and forcing consumers into worse financial situations.
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