Banks Push Back Against Credit Card Interest Cap

The largest U.S. banks are sharply criticizing President Donald Trump’s proposal to cap credit card interest rates. The president has announced a one-year limit of 10 percent, arguing it would help lower the cost of living for consumers. Financial institutions counter that such a move would undermine their business models and could harm the broader economy.

Chief financial officers at JPMorgan, Citigroup, and Wells Fargo stress that an interest cap would reduce the profitability of lending, particularly to customers with lower creditworthiness. They argue banks would be forced to scale back access to credit cards, potentially slowing economic growth. Citigroup adds that consumers themselves could face unintended negative consequences.

Trump claims card issuers charge excessively high rates, often between 20 and 30 percent. Data from Bankrate.com show the current average U.S. credit card interest rate stands at about 19.6 percent. Credit cards also account for roughly 70 percent of retail payments nationwide, underscoring their importance to everyday spending.

Some experts believe banks’ concerns are overstated. Academic analyses suggest a cap would cut sector profits but would not cause a severe contraction in credit supply. Others caution, however, that consumers might be pushed toward less regulated—and potentially riskier—borrowing options.

The president’s idea has drawn mixed political reactions, and its prospects in United States Congress remain uncertain. Implementing the cap would require new legislation, and skepticism is already emerging within the Republican Party. Even so, the cost of credit is becoming a central topic in the debate ahead of the upcoming elections.

In the United States, household debt has reached record levels. Recent data put total household liabilities at about $18.59 trillion—averaging more than $105,000 per household. Mortgages make up the largest share, but credit card debt is also substantial and continues to rise. On average, a U.S. household carries around $9,300 in credit card balances, often at high interest rates. In this context, lower card rates could meaningfully reduce debt-servicing costs for many families and improve their financial liquidity.