BY ELEASE EVANS

For more than four decades, the New Jersey Black Issues Convention (NJBIC) has served as one of the state's leading nonpartisan advocacy organizations dedicated to advancing policies that improve the quality of life for Black residents and other historically underserved communities. Through public policy advocacy, civic engagement, leadership development, and partnerships with business, faith, education, and community leaders, NJBIC works to expand economic opportunity, strengthen families, promote educational excellence, and ensure equitable access to the resources necessary for communities to thrive.

Central to our mission is advancing economic justice.

We recognize that closing racial wealth gaps requires policies that expand access to capital, encourage entrepreneurship, support small business development, and create pathways to financial stability. Every public policy proposal should be evaluated not only by its intentions but also by its impact on the communities it seeks to serve.

There is little disagreement that American families are struggling. Inflation has strained household budgets, housing costs continue to climb, and everyday necessities have become increasingly difficult to afford. For many families, credit cards have become less of a convenience and more of a financial bridge between paychecks.

That is why proposals to cap credit card interest rates at 10 percent have gained bipartisan attention. The goal is understandable: reduce borrowing costs and provide relief to working families.

However, good intentions do not always produce good policy.

As Chairperson of the New Jersey Black Issues Convention, I am deeply concerned that a federal 10 percent credit card interest rate cap would disproportionately harm the very communities policymakers are seeking to protect—particularly Black entrepreneurs, minority-owned small businesses, and working families who already face significant barriers to accessing affordable capital.

For generations, Black Americans have encountered unequal access to traditional banking services, business lending, and wealth-building opportunities. Although progress has been made, the capital gap remains substantial. According to the Federal Reserve's Small Business Credit Survey, minority-owned businesses are more likely to rely on credit cards as a source of operating capital because they are less likely to receive traditional bank loans or lines of credit.

For many entrepreneurs, a credit card is not financing vacations or luxury purchases. It pays for inventory, purchases equipment, or keeps the lights on while waiting for invoices to be paid.

A government-imposed 10 percent interest rate cap would dramatically alter the economics of credit card lending. Lenders price interest rates based on risk. When government artificially limits pricing below what lenders believe is sustainable, lenders do not simply absorb the loss. They respond by tightening underwriting standards, lowering credit limits, reducing available credit, or denying applications altogether.

Research consistently demonstrates this reality.

Recent analysis by the Urban Institute found that approximately 76 percent of all U.S. credit card holders currently have at least one card with an annual percentage rate above 10 percent. More importantly, consumers with lower credit scores—the very borrowers who often have fewer financial alternatives—would be most affected. About 90 percent of consumers with subprime credit scores and 87 percent with near-prime scores currently use cards that exceed the proposed cap.

These are not abstract statistics. They represent millions of working Americans, aspiring entrepreneurs, caregivers, and families who rely on access to revolving credit during financial emergencies.

For minority-owned businesses, the consequences could be especially severe.

Black-owned businesses are significantly more likely to operate with limited cash reserves and lower levels of outside investment. Many depend on personal credit cards to finance business operations, particularly during the early stages of growth when traditional financing is often unavailable. If lenders reduce credit availability because they cannot profitably serve higher-risk borrowers under a 10 percent cap, these entrepreneurs could lose one of the few accessible sources of working capital they currently have.

The result would likely be fewer business startups, slower business expansion, fewer jobs created within underserved communities, and greater economic inequality.

Even more troubling is what happens when responsible credit disappears.

History shows that consumers who lose access to mainstream credit frequently turn to less regulated financial products. Some may rely on payday loans, costly installment products, or alternative financing arrangements that often provide fewer consumer protections, less transparency, and, in many cases, higher effective borrowing costs than the credit cards they replace.

A policy designed to reduce financial hardship could unintentionally increase it.

This does not mean the status quo is acceptable. But limiting interest rates through an arbitrary federal cap addresses the symptom rather than the underlying problem. If policymakers truly want to strengthen financial security, they should focus on the conditions driving families to rely on credit in the first place.

If policymakers truly want to strengthen financial security, they should focus on the conditions driving families to rely on credit in the first place.

That means making housing more affordable. It means reducing child care costs. It means expanding access to quality health care. It means strengthening tax credits for working families. It means increasing access to responsible small-business lending, supporting Community Development Financial Institutions, expanding financial education, and encouraging competition among lenders.

These strategies help families build financial resilience rather than simply limiting one financial product.  Economic equity is not achieved by restricting access to opportunity. It is achieved by expanding it.

The New Jersey Black Issues Convention has long advocated for policies that close racial wealth gaps, expand entrepreneurship, and increase economic mobility. We must carefully evaluate proposals not only by their intentions but also by their real-world consequences for communities that have historically been underserved by our financial system.

A 10 percent credit card interest rate cap may sound appealing, but for many Black families and minority-owned businesses, it could mean fewer financial options, reduced access to capital, and diminished opportunities for economic advancement.

We should pursue policies that make credit more affordable without making it less accessible.  Our communities deserve solutions that expand opportunity—not unintentionally close the doors to it.

Elease Evans is the Chairperson of the New Jersey Black Issues Convention, a position she previously held, and was a member of the New Jersey General Assembly where she represented the 35th legislative district (Passaic).