Credit Card Rates Capped at 10%? The US Economy Could Take a Hit

Jakarta, Gotrade News - President Trump’s plan to cap credit card interest rates at 10% is getting serious pushback from top bank executives in the US. This policy risks killing off credit access for the majority of consumers and slamming the brakes on broader economic growth as spending power could dry up.

Key Takeaways

• President Trump proposed a 10% cap on credit card interest rates, effective from January 20, 2026.

• Bank CEOs warn that this policy would basically turn credit cards into a luxury item only for the wealthy.

• Reduced access to credit could trigger a domino effect, hitting retail, travel, and the US GDP hard.

Right now, average credit card rates in the US hover around 21%, with total outstanding debt hitting US$1.23 trillion.

According to Federal Reserve Bank of New York data cited by Investopedia, the credit card segment rakes in profits four times higher than the banking industry average.

Slashing rates this drastically would likely make these products unprofitable, forcing banks to tighten their belts and restrict who gets a card—big time.

CEO of Citigroup Inc. Jane Fraser stressed that the vast majority of consumers and businesses would lose access to credit cards if this rule kicks in.

Speaking on the company's earnings call, Fraser mentioned that folks would be forced to turn to more predatory lending alternatives because credit cards would only be available to the rich.

Echoing Fraser, JPMorgan Chase & Co. CEO James Dimon noted that these price controls would severely compress profit margins.

Dimon warned that the people who need credit the most are exactly the ones who would lose access, leading to negative consequences for the macro economy.

The Domino Effect

Limiting credit access doesn’t just hurt banks; it hits the real sector that relies on consumer buying power.

Fraser added that we’d see a domino effect across retail, travel, and hospitality sectors, potentially slowing down the US GDP.

Meanwhile, Bank of America Corporation CEO Brian Moynihan highlighted that credit limits for existing cardholders would likely be slashed too.

According to Moynihan, this restriction needs to be weighed against the government's initial vibe of making life more affordable.

On the flip side, financial services stocks took a dip in response to the proposal targeted for Jan 20.

However, LendingTree CEO Scott Peyree actually sees an opening here, predicting consumers will flock to personal loans if banks stop issuing new credit cards.

Reference:

• Seeking Alpha, Bank CEOs push back against Trump’s call for credit card interest rate cap. Diakses pada 15 Januari 2026

• Investopedia, Bank Execs Say Trump's Credit-Card Interest Rate Idea Is Bad for Consumers—and Business. Diakses pada 15 Januari 2026

• Featured Image: Shutterstock