Earlier this month, Senator Bernie Sanders announced that he would introduce legislation to cap interest rates charged by credit card companies at 10%.

On the surface, this might seem like a good thing because it promises to reduce expenses, but in the real world, rather than reducing your interest rates, it will actually just reduce credit available to millions of Americans with lower credit scores. That’s because interest rates are based on risk of default. In other words, the more likely a customer is to default on their debt to a creditor, the higher their interest rate will be.

So if you have an 800+ credit score, statistically speaking, a creditor knows your likelihood of defaulting on your debt to them is near zero. On the other hand, that guy with a 450 credit score who can never seem to get his life together—he’s pretty likely to default. So a creditor will charge you a lower interest rate than they would charge him because their capital is safer in your hands.

When the other guy, let’s call him Steve, defaults, they don’t just lose out on the balance he owes them, they also incur additional legal and administrative costs. A company that consistently loses money will eventually go out of business, so in order to provide credit to riskier customers, creditors need to charge higher interest rates to offset their losses. This is basic economics.

So what happens when legislation caps the interest rate lenders can charge at 10 percent?

Several things, and the first and most significant is that credit programs available for people with little or no credit will be eliminated because they’re no longer profitable. Instead, they will simply change their underwriting guidelines to eliminate all but the best customers—and this isn’t a hypothesis, we see it happen anytime the country faces economic uncertainty. During every financial correction in history, underwriting guidelines have tightened, cutting many people out of the credit markets entirely.

Look at how drastically things have changed in the mortgage industry for example. Before 2008, you could basically get a mortgage if you just had a pulse. Then, following the crash, underwriting became more stringent again. As the economy slowly recovered over the next several years, things loosened up again, and now as the economy is rapidly weakening, guidelines are tightening yet again. This affects all account types but it’s most severe with credit card, and when it happens, the lower two thirds of consumers will essentially be locked out of access to credit.

It’s worth noting that this isn’t limited to new credit—existing accounts will be closed if the borrowers no longer qualify under the new underwriting guidelines.

Beyond the initial impact, this would also force a huge swath of the industry to close up shop permanently because they could no longer generate a profit. This leads to fewer options for all consumers as the giant corporations with deep pockets consolidate to monopolize the market. That’s not a good situation for anyone because when consumers have fewer options, overall service declines dramatically.

Ironically, the people adversely affected by this proposed legislation the most are also the ones most excited about it.

This is a problem of financial literacy. If more people understood critical economic topics, and most dint, they would see the dangers of policies like Sanders is proposing. They would understand that they’re not being “ripped off,” but rather that they’re being charged to offset their risk of default. And they would likely have made better financial choices that would have led to a lower interest rate in the first place.

If legislation to cap interest rates is implemented, fewer Americans will have access to credit, making them more susceptible to unexpected financial emergencies. This further erodes financial stability for individuals and for the economy as a whole, because like it or not, both depend on a strong credit market.

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Ari Page is the CEO of Fund&Grow, which helps entrepreneurs get the business credit they need to run and scale their companies. He is recognized as one of the leading experts in the industry, and is regularly asked to speak on the topic on stage and in the media.