Price controls don’t work. Including credit cards.

Experience is life’s greatest teacher. And history shows repeatedly that price controls do not deliver the results their supporters intend. While often driven by good intentions, government-mandated price caps distort markets, restrict supply and ultimately harm the very consumers they are meant to help.

The evidence is clear.

In New York City, decades of rent control and heavy-handed regulation have left nearly 50,000 housing units sitting vacant and many others in disrepair, even as average rent has climbed past $5,600 per month. In the 1970s, federal price controls on oil and petroleum products triggered shortages, supply disruptions and long lines at gas stations across the country. In socialist countries such as Venezuela, rigid price caps have produced chronic shortages and thriving black markets.

The conclusion is unavoidable: Price controls don’t work.

That’s why President Donald Trump’s recent proposal to cap credit card interest rates at 10%, while well-intentioned, would likely produce the same unintended consequences. Although the idea is framed to make borrowing more affordable, a strict rate cap would fundamentally change how lenders operate and who they are willing to serve.

If enacted, this proposal would almost certainly restrict access to credit for millions of Americans, particularly small business owners, individuals with lower credit scores, younger credit histories or inconsistent incomes. For many families and entrepreneurs, credit cards are not luxuries: they are essential tools for managing cash flow, handling emergencies and sustaining small businesses. Limiting access would force consumers toward more expensive and less regulated alternatives, increasing financial strain rather than easing it.

Even borrowers with strong credit would not escape the consequences. To offset lost revenue, lenders would likely impose higher annual fees, reduce credit limits and scale back rewards programs and promotional offers. These benefits, often used for everyday expenses like groceries, gas and travel, help families stretch their budgets.

The scope of the impact would be significant. Analysts estimate that if a 10% interest rate cap were imposed, consumers with credit scores below 740, nearly nine out of 10 Americans with a credit card, could lose access to revolving credit altogether.

This reality explains why the proposal has drawn concern from across the political spectrum. While progressive lawmakers and socialist activists have embraced the idea, prominent Republican leaders, including Senate Majority Leader John Thune of South Dakota and Sen. Thom Tillis of North Carolina, have warned that such a cap could severely restrict credit access for millions of Americans.

At Americans for Free Markets, we believe that affordability challenges should be addressed through competition and innovation, not government price mandates.

Price controls are not the solution to America’s affordability crisis. Limiting government overreach and allowing our free markets to work as intended are the answers. Mandating a universal interest rate limit could force lenders to terminate credit access for millions of American families that rely on credit cards for everyday expenses and emergencies. Price controls like this do not make credit cheaper. They make it more difficult to obtain.

Rising consumer debt and financial stress are real concerns. But history shows that rigid interest rate caps only make those problems worse. Competitive markets already offer consumers a wide range of options, including credit cards with low or even zero-percent introductory rates.

That competition benefits families, entrepreneurs, and small businesses alike.

We commend President Donald Trump for prioritizing affordability and economic security. We encourage Congress and the administration to carefully weigh the unintended consequences of government-mandated price controls and instead pursue policies that foster economic growth, competition and opportunity.

When it comes to affordability, free markets — not government price caps — remain the most reliable path forward.

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David Ibsen serves as the executive director of Americans for Free Markets (AFFM).