I founded the Delaware Black Chamber of Commerce (DEBCC) in 2020 after recognizing a critical need for support among Black-owned businesses during the COVID-19 pandemic. As an entrepreneur myself, I’ve experienced the challenges Black business owners face—especially when it comes to accessing capital.
That firsthand experience drives our mission at the DEBCC: to create and sustain pathways for Black entrepreneurs and small business owners to succeed. It’s also why I feel compelled to speak out against a federal proposal that could ultimately do more harm than good: capping credit card interest rates.
At first glance, capping interest rates might seem like a win for consumers and small business owners. After all, who wouldn’t want lower costs on borrowed money? But as someone who works every day with more than 600 Black-owned and minority-owned businesses across Delaware, I can tell you: this approach overlooks the economic realities of those it aims to protect.
Small businesses, particularly those run by Black and brown entrepreneurs, often rely on credit cards as a vital bridge—whether it’s to cover inventory, manage payroll, or navigate seasonal cash flow gaps. With traditional lending historically out of reach for many of our members due to systemic bias and credit barriers, credit cards have become one of the only accessible and flexible financing tools available.
Capping interest rates—say at 10%, as the current policy proposes—might sound like a good idea, but it could actually reduce access to credit altogether, disproportionately affecting Black and brown communities. Lenders aren’t non-profits; they make risk-based decisions. For applicants with lower credit scores, thinner financial histories, or inconsistent income—all too common among new and minority-owned businesses—the math no longer works under a capped model. Banks and credit card issuers will simply stop offering credit to those considered higher risk. And that means our businesses are shut out.
This could disproportionately impact Black-owned businesses, which already face a staggering racial wealth gap and significantly lower approval rates for traditional loans. According to the Federal Reserve, Black business owners are twice as likely to be denied credit, and even when approved, they’re more likely to receive smaller amounts at higher interest rates.
The consequences of capping credit card interest rates would not stop there. Our communities would be heavily impacted, with many facing reduced access to credit through no fault of their own. If a cap on credit card interest rates is implemented, banks are likely to respond by tightening lending standards, especially for borrowers considered high risk. As a result, individuals who rely on credit cards for emergencies could be left with fewer options and may be pushed toward predatory lenders, who can charge interest rates as high as 300-400%. This would also indirectly impact consumer spending, ultimately slowing economic activity in our communities and exacerbating existing financial disparities.
Removing access to this line of credit, without offering an alternative, is like taking away someone’s crutches and asking them to run. It’s not just unfair—it’s economically damaging. Instead of punitive caps, we should talk about solutions that actually expand opportunity such as more community-based lending programs.
The DEBCC was proud to be named the 2023 National Black Chamber of Commerce of the Year—not because we work with ideal policy, but because we work with real people. And I can tell you that real people need access to credit, not more barriers to it.
Capping credit card rates may be well-intentioned, but the reality is it risks locking out those who already face the most hurdles. Let’s craft smarter policies that lift up Black entrepreneurs, not lock them out.
Ayanna Khan is the founder and CEO of the Delaware Black Chamber of Commerce.
