JPMorgan Chase CEO Jamie Dimon has issued a stark warning against former President Donald Trump’s proposal to cap credit card interest rates at 10%. Dimon described the plan as an “economic disaster” that would severely restrict credit access for a vast majority of Americans and negatively impact numerous businesses.
Speaking at the World Economic Forum in Davos, Dimon emphasized that such a cap would not only harm consumers but also cripple businesses that rely on credit card transactions. He stated that while his bank would survive, the broader economic fallout would be severe. Dimon suggested that if the cap were to be implemented, it should be trialed in the home states of senators who have supported similar measures, namely Vermont and Massachusetts for Bernie Sanders and Elizabeth Warren, respectively.
Industry experts and banking associations have echoed Dimon’s concerns. They predict that banks would likely respond by reducing credit limits, closing riskier accounts, and scaling back rewards programs. Five major US banking bodies issued a joint statement warning that the cap would push consumers toward “less regulated, more costly alternatives.” The average credit card interest rate in the US currently stands around 20%.
Former President Trump has reiterated his call for a 10% cap, stating on social media that the American public should not be “ripped off.” He has also indicated a desire for Congress to pass legislation to enforce such a cap. Trump’s initial announcement on Truth Social caused a noticeable dip in the shares of major credit card companies like American Express, Visa, and Mastercard, as well as UK bank Barclays.
Despite support from some progressive Democrats, the proposal faces significant political hurdles. Republican House Speaker Mike Johnson has expressed concerns about potential “negative secondary effects.” Banking executives, including Citigroup CEO Jane Fraser, have also expressed skepticism about the likelihood of Congress approving such caps, though they acknowledge the need to address affordability concerns for consumers.