Keeping the Path to the American Dream Open: Why Credit Caps Threaten Arizona’s Progress
By Ana Valenzuela, National Vice President/Elderly, LULAC
In Arizona, our neighborhoods are shaped by the resilience of Hispanic families and the drive of our entrepreneurs. I am proud to represent an organization that has fought for nearly a century to ensure that every Latino has a fair shot at the American Dream. From the desegregation battles of the 1940s at Tempe Beach to our current advocacy for educational equity, LULAC has always known that civil rights and economic opportunity are two sides of the same coin.
One of the most essential, yet often overlooked, tools for achieving that opportunity is access to safe, regulated credit. For generations, the Hispanic community was largely excluded from the formal financial system.
We’ve fought hard to dismantle and overcome those barriers, and today, we live in a much more inclusive era where the door to the regulated banking world is open to millions who were once considered “credit invisible.” Credit cards have played an important role in this expansion of access to credit for so many hard working families and small businesses in our community.
Today, 80% of Americans have a credit card and, according to Bankrate, 71% of Hispanic Americans have at least one. Roughly 50% of all businesses rely on credit cards as a source of financing, and a 2026 survey conducted by the United States Hispanic Business Council found that 82.7% of Hispanic-owned small businesses currently use a business credit card. This progress has allowed our families to handle medical emergencies without falling into ruin and enabled our entrepreneurs to start the small businesses that are now the fastest-growing segment of Arizona’s economy. Having the option to obtain a credit card is important in our modern economy.
However, a proposed 10% federal cap on credit card interest rates threatens to quietly close those doors again. We often hear that capping interest rates will protect consumers and lower costs, but unfortunately, that’s not true and such a policy ignores the fundamental reality of how credit works.
Lending is a business of risk. Credit cards are “unsecured”—meaning they aren’t backed by collateral—interest rates must cover the actual cost of doing business, including the risk that a loan might not be repaid. This system of “risk-based pricing” gives lenders a path to say “yes” to a first-generation business owner or a family with a thin credit file. But if we move to a system where the government imposes a cap below the cost of that risk, it doesn’t necessarily mean rates would come down. The result could be that access to credit simply dries up for anyone deemed to be even the slightest bit risky.
Data from the American Bankers Association (ABA) shows that a 10% cap would create widespread negative impacts on Arizonans. Most credit card holders, even those who pay their balance in full every month, would see tighter credit standards, lower credit limits, and reduced benefits. Between 3 million and 3.48 million Arizonans would be at risk of losing their primary source of short-term credit entirely, or see their limit sharply reduced. If Arizonans or Hispanic consumers and business owners lose access to regulated credit, they will have to turn toward unregulated, high-cost alternatives that strip wealth away from our community, like payday lenders who charge up to 400% interest.
Arizonans know that the best way forward is to come together to find solutions that promote fair and responsible lending. I hope you’ll join me in calling on our lawmakers to reject rate caps and instead focus on protecting the financial tools that keep the path to a more prosperous future open for all Arizonans.
