A record 111 million U.S. consumers were carrying a balance on their credit cards at the end of last year—two million more than at the end of 2024. Together, these cardholders now owe more than $1 trillion to banks.
Based on average outstanding balances, a typical cardholder making only the minimum payment would pay about $251 per month, or more than $3,000 per year. Meanwhile, interest would continue accruing on roughly 98% of the remaining balance.
Seeking a Solution
These figures come from researchers at the Century Foundation, a progressive think tank, and the nonprofit Protect Borrowers. While the groups cite these numbers to argue for lower credit card interest rates, the broader picture is more complex.
The Century Foundation supports a proposed 10% annual interest rate cap backed by President Trump and some Democrats, including Massachusetts Senator Elizabeth Warren. However, industry experts warn that capping rates at such a low level could significantly reduce access to credit cards for many households.
For one thing, rates have already begun to edge down, albeit slightly. Borrowers paid an average annual percentage rate of 22.3% in Q4 2025, according to the Federal Reserve, down from 22.8% in 2024.
Consequences of Capping Rates
The Century Foundation estimates that a 10% cap would have saved consumers $134.5 billion since Trump took office. Critics counter that such a cap would likely have restricted access to credit for many borrowers, rather than simply lowering their costs.
Separate data from Javelin Strategy & Research suggests that the cost of lending was about 13% in 2025. At a 10% cap, lenders would likely scale back lending to all but the most creditworthy borrowers—potentially those with FICO scores near 800 or higher. In practice, that could limit access to credit to roughly 200 million Americans, or about 80 million households.
“This research overlooks the fact that credit cards are helping many people affected by persistent inflation, rising rates, and an uncertain economy,” said Brian Riley, Director of Credit at Javelin. “Without access to credit cards, consumers will not have access to short-term borrowing tools that keep them afloat when the budget runs tight, the car starts to sputter, or an unexpected emergency arises.”
“Don’t blame credit card issuers, who bear the risk for the floundering economy,” he said. “Look upstream at inflation, unemployment, and household budgets in disarray. That’s the real issue.”
