ICYMI: Senator Toomey on FOX Business: Credit Card Interest Rate Caps Reduce Access, Raise Costs 

“Anytime the government tries to impose price controls on anything, you end up with shortages.”

In case you missed it, former U.S. Senator and Americans for Free Markets (AFFM) Advisor Pat Toomey joined Stuart Varney on FOX Business’ Varney & Co. to discuss why capping credit card interest rates, a form of government-mandated price controls, would harm consumers.

Senator Toomey explained that while price controls on credit card interest rates may sound appealing, in practice, they would hike costs for everyday Americans and reduce credit access.

“[Rate caps] sounds good superficially, but as you know, Stuart, anytime the government tries to impose price controls on anything, you end up with shortages. There’s a reason that credit cards cost what they cost. It’s because there are expenses to operate. They are, after all, unsecured loans. Some of them don’t get paid back. Banks need to recover those costs, as well as all the infrastructure, security, and the chargebacks.

“So, if you come along and artificially impose some level that doesn’t cover those costs, then banks are going to have to either charge more elsewhere, or they’re going to discontinue making credit cards available—especially to lower-income consumers, who will then have to go to payday lending or other sources. They won’t feel like they’re saving money if they have to turn to those alternatives.”

The interview follows a recent op-ed in FOX News Digital by Sen. Toomey and former U.S. House Ways and Means Committee Chairman and AFFM Advisor Kevin Brady outlining how the president’s credit card interest rate cap proposal could force banks to raise fees and reduce access to credit cards for lower-income families. Rather than addressing affordability through government-mandated price controls, they argue that Congress should “let the marketplace continue to offer consumers, working-class families and Main Street businesses, of all incomes, access to the credit they need.”

The full interview can be viewed HERE.