When policymakers propose capping credit card interest rates, they're swimming against a powerful current—decades of economic consensus. The idea that controlling prices through regulation can solve market problems sounds intuitive, but economists have long documented why such interventions often backfire.

Credit card rates exist because of risk—defaults, operating costs, and capital requirements. Artificially capping them without addressing these fundamentals typically leads to reduced credit availability for riskier borrowers, tighter lending standards, or lenders shifting costs elsewhere. It's the same pattern we've seen play out across different markets and time periods.

This isn't abstract theory. When price ceilings are set below market-clearing levels, shortages tend to follow. Borrowers who need credit most might find themselves worse off, not better. The policy sounds pro-consumer but can create perverse outcomes that hurt the very people it aims to help.

The tension here reveals a deeper principle: markets reflect real constraints and risks. Ignoring those constraints through regulation doesn't make them disappear—it just changes how they manifest.