(NewsNation) — As Americans face record amounts of credit card debt, both Vice President Kamala Harris and former President Donald Trump have campaigned on easing the financial burden for every day Americans.
The average credit card debt is now $8,674, with Generation X owing the most followed by Baby Boomers, millennials, the Silent Generation and Generation Z.
Credit card policies
Trump has advocated for an interest rate cap of 10% on credit cards to help borrowers. The current average interest rate is near 23%, and rates haven’t fallen on pace with Federal Reserve interest rate cuts. That’s in part because credit card companies want to maintain profit margins.
It would take an act of Congress to enact such a cap, however, and it’s not clear Trump could get it done. Banks have also warned a rate cap could make it harder to borrow money, though consumer advocates have said banks traditionally oppose any efforts to limit the interest rates they can gather.
Harris hasn’t introduced any credit card-specific policies but has touted the Biden administration’s work to forgive medical and student loan debt, as well as efforts to cut down on hidden junk fees that can surprise consumers thinking they are getting a good deal.
Interest rates
While credit card interest rates may not keep pace with the Fed’s lowered key interest rate, they do tend to follow each other, to an extent.
A survey of economists found that 68% thought Trump would be worse for inflation than Harris in a recent survey.
If that proved to be true and inflation started going back up, the Fed could potentially start raising interest rates again, and credit card companies would likely pass the burden onto consumers, making it harder to pay off debt.
Economic outlook
In addition to credit cards, the candidate’s overall economic strategies could impact Americans’ ability to tackle credit card debt.
Under Trump’s plan, economists have predicted rising inflation and lower employment, possibly leading to recession. Trump has campaigned on extending tax cuts, which could be a welcome relief, but has also proposed stiff tariffs.
While Trump has claimed foreign companies would pay the tariffs, historically, consumers have been the one to bear the burden of tariffs, which typically lead American importers to raise prices.
Harris has campaigned on increasing tax credits for first-time home owners and the child tax credit while vowing to raise taxes on those making over $400,000 to help pay for those and other economic policies.