Which Candidates Will Drive Up Cost of Credit

Star Parker on Sep 2, 2026

It's midterms crunch time, so we are hearing endless political promises from all candidates. My hope is that with so much talk about affordability and economic growth, a voter or two would raise their hand and ask about price controls and credit card caps.

These might seem such minuscule topics to interpret some political grandstanding and drama of the headlines, but Congress is having these discussions right now, and far too many of our elected representatives can't bring themselves to understand that price controls hurt the middle class and hardworking people who live paycheck to paycheck.

When politicians try to impose price controls, working families pay the price. This is especially apparent when the government attempts to impose price controls on credit cards.

Price controls don't make scarce goods abundant, risky loans safe or bad choices cost-free. Bookshelves are sagging with data that rent, wage and price controls distort markets.

Political promises of caps don't erase costs; they simply force suppliers to cut back, raise prices elsewhere, or stop serving the very customers who might need financial breathing room.

And yes, sometimes that breathing room could mean borrowing at higher interest rates, but the alternative would be worse. Put simply, price controls create shortages. And these shortages increase costs, and they create a vicious cycle for folks who need a rung.

Washington has recently toyed with price controls on credit cards through interest-rate caps and restrictions on late fees, as if credit can be made cheaper by government order. But when the government suppresses interest rates or late fees, it only reduces the availability of credit for everyone.

Lenders price credit around repayment risk, funding costs, fraud, servicing, compliance and capital requirements, yet interest rate caps masked as consumer protection pull the first rung from the ladder of folks trying to build credit or launch a business.

It's not rocket science to know that if Washington bars lenders from pricing risk accurately, the market response will be lending less, tightening approval standards, reducing credit lines or shifting costs into fees.

Working families most likely to lose access are the very consumers with thin credit files, uneven income or past financial setbacks. These are often the families who need access to mainstream credit the most.

In fact, according to the National Foundation for Credit Counseling, "approximately 43 million Americans rely on credit cards not for luxury vacations, but as a survival tool to bridge the gap between their paycheck and their expenses."

Rate caps assume lenders and borrowers will stand still after Washington changes the rules. But markets always adjust. Analysis from the International Center for Law & Economics makes the point clearly that when risk-based pricing is constrained, credit supply shrinks for borrowers, costs shift to other fees, and innovation and competition can suffer.

All candidates running for office should be asked about price controls and whether they think late fees are arbitrary. A sincere politician would answer that late fees encourage timely payment, cover collection and servicing costs, and help preserve lower costs for borrowers who manage their accounts and credit opportunities responsibly.

The Democrats' latest efforts to cap late fees will not make Americans' lives more affordable. If they gain more power in Congress this election, our working class might be pushed back into the days of layaways and toward a day of saying bye-bye to credit access for cars, college or first-time homes.

Borrowers need to keep opportunities to educate themselves about the nuances of credit cards, not cede for some bureaucrat to decide what risk should cost.

The moral case for free markets is not that every outcome is perfect. It is that free people, honest prices and personal responsibility produce better results than bureaucratic promises.

Star Parker is founder of the Center for Urban Renewal and Education and author of "Necessary Noise, How Donald Trump Inflames the Culture War and Why this is Good News for America" (Hachette 2019). To find out more about Star Parker and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.

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