Elizabeth Warren, never short on annoyances, thinks that interest on consumer credit cards is too high.

The average rate currently hovers around 21 percent. Her solution: Pass a law to cap interest rates at 10 percent. She says she has a bill ready to go, and like-minded lawmakers have signaled their support for controlling rates.

Like any other price ceiling, would create a shortage of the product it attempts to make more affordable. With only a tiny fraction of credit cards now offering interest at 10 percent or less, capping rates at that level would force lenders to dramatically restrict accounts — requiring borrowers to put up collateral or limiting access to people with exceptionally good credit — or eliminate them outright.

To progressives, interest on credit cards is nothing but usury — the exploitation of poor borrowers who can’t afford to pay their bills on time. Warren’s sales pitch implies that, under her bill, people would enjoy the same credit just at a lower cost. In reality, almost everyone would see their credit cards disappear.

Regrettably, Warren may also find allies for her proposal among Republicans. She claims she is open to working with , who called in 2024 for a temporary cap on credit card interest of “around 10 percent.” Senator Josh Hawley (R., Mo.), a right-wing progressive of sorts, recently joined hands with Bernie Sanders to translate that thoughtless musing into legislation.

Interest rates are not some arbitrary number. They are the price for lenders to provide liquidity on the promise, but never the certainty, that it will be repaid. To issue loans through a credit card, banks must first obtain the money by borrowing it themselves, either from depositors or other financial institutions. Interest must be paid on that debt and passed through to cardholders.

It’s true that rates on credit cards, as well as other consumer loans, are typically much higher than those for mortgages and businesses. That is because personal credit is one of the riskiest kinds to extend. Unlike secured loans, repayment depends wholly on borrowers’ creditworthiness. That often fails to hold up: 13 percent of credit-card balances are seriously past due, and approximately 5 percent of debt is never repaid. Higher interest rates exist to compensate for these losses.

Rates also vary based on individual creditworthiness. Borrowers with poor credit history, or people just starting to build their history after leaving childhood or moving to the country, have the most to lose from interest caps. They must accept costlier rates to obtain any credit whatsoever, and if lenders can’t adjust for their added risk, they will simply be cut off. Those in need of funds will instead have to turn to pawnshops or illegal loan sharks.

The credit card industry could always use more competition to keep interest rates at their fair market level. Ironically, the Dodd-Frank Act that Elizabeth Warren championed likely reduced the availability of consumer credit by increasing lenders’ regulatory burden. Warren also despises credit reporting agencies for tracking borrowers’ repayment histories, even though they replaced a far more discretionary and intrusive system in which bankers evaluated applicants’ personal reputations. For someone so appalled by alleged discrimination in finance, she should love objective credit reports.

By and large, Americans like their credit cards and wish to keep them. In trying to rescue consumers from their own financial decisions, Warren would deprive them of their plastic and consign them to infinitely more treacherous alternatives.