Credit card debt mounts amid Democrats’ push to cap interest rates

New data shows Americans’ credit card balances are mounting, as some Democratic lawmakers push for capping interest rates.

Credit card balances increased by $22 billion in the third quarter, an increase of 1.7 percent relative to the second quarter, the Federal Reserve Bank of New York reported Tuesday .

Credit card debt for this year topped $1.28 trillion, as credit card balances in the third quarter were $52 billion greater than they were in the third quarter of 2025, according to the New York Fed .

Roughly 6.9 percent of credit card holders flowed into “serious delinquency” in the third quarter, meaning they missed at least three straight monthly payments. That is lower than the 7.05 percent of holders who flowed into serious delinquency in quarter three of 2025.

President Trump in January called on credit card companies to cap interest rates at 10 percent for one year. The average credit card interest rate was 19.71 percent as of Wednesday, according to Bankrate .

Sen. Elizabeth Warren (D-Mass.) said Sunday she wants to codify that cap, as Democrats will take control of both chambers of Congress in January

“I got the bill, I’m ready to go,” Warren said on CBS News’s “ Face the Nation .” The Massachusetts Democrats is in line to chair the Senate Banking Committee.

Sen.-elect James Talarico (D-Texas) also campaigned on capping interest rates, calling credit card companies “predatory.”

But Jessica Riedl, a budget and tax fellow at the Brookings Institution who worked for former Sen. Rob Portman (R-Ohio), argued that capping interest rates will result in banks cancelling the credit cards of “everyone with a credit score under 750.”

She wrote on social platform X , “I bet they’ll love having to instead rely on payday loans, pawn shops, and local loan sharks to provide quick credit in a pinch.”