JPMorgan CEO Deems Trump’s 10% Credit Card Rate Cap an Economic Disaster That Could Cut Credit for 80% of Americans

Breaking: Trump Proposes one-Year 10% Cap On Credit Card Interest, sparking Bank Warning

Breaking news: The White House signaled a sweeping policy shift by proposing a one-year cap of 10% on credit card interest, set to take effect on January 20, 2026. The plan immediately drew sharp warnings from major banking executives and industry groups.

The head of one of the world’s largest banks described the move as an “economic disaster.” In Davos, the chief executive of JPMorgan Chase argued the cap would shrink credit access for the majority of americans and disrupt spending across restaurants, retailers, travel firms and schools.

Under the proposal, lenders would be barred from charging more than 10% in interest on credit cards for a 12-month period. The management has not detailed the mechanism for enforcement or the legislative path required to implement such a cap.

Critics say the policy would dramatically restrict consumer borrowing. The bank executive warned that as credit becomes harder to obtain,about four in five Americans could face reduced access to card lending,with downstream effects on monthly bills and services people rely on.

Industry insiders expect banks to respond by tightening underwriting, trimming credit limits, and curbing rewards programs, as a lower lending yield makes it harder to offset potential losses. Five major U.S. banking associations warned the cap could push consumers toward less-regulated, costlier alternatives, potentially harming households and small businesses.

The administration has faced pushback from fiscal policymakers and market participants. The bank executive, speaking after public comments at a global forum, said the impact would extend beyond lenders to the broader economy, from retailers to municipalities that rely on robust consumer spending.

On social media this week, the president defended the concept, saying credit card companies profit excessively and that ordinary Americans deserve relief.He reiterated the proposal in subsequent interviews, noting that while banks may have to adjust, the goal is to relieve households from high debt service burdens.

Market responses were swift. Shares of major card issuers and payment networks dipped as investors weighed the potential disruption to consumer credit flows. Banking officials reaffirmed concerns about the plan’s feasibility and its broader consequences for financial stability.

Current data shows that the typical credit card APR in the United States runs around 20%. Proponents argue that relief from high interest would help households reduce debt and increase discretionary spending. Opponents contend the cap would suppress lending, raise the cost of credit in other forms, and undermine the financial system’s ability to absorb risk.

Trump’s post early this year announcing the cap drew attention from financial markets and policy observers, with analysts noting the challenge of turning a campaign proposal into enforceable policy. News outlets covering the statements highlighted the tension between consumer relief and the need for sustainable credit funding.

For readers seeking context, similar debates have played out in different jurisdictions, where caps on lending rates have yielded mixed results depending on the broader regulatory environment and the availability of alternative financing channels. Experts emphasize that any temporary cap should be paired with long-term reforms that preserve responsible lending and consumer protections.

Key Facts At A Glance

Aspect	Details
Proposed cap	10% annual interest on credit cards for 12 months
Effective date	January 20,2026 (for one year,if enacted)
Current typical APR	Around 20% on average
Expected lender RESPONSE	Reduced lending,tighter underwriting,fewer rewards programs
Market reaction	Shares of card issuers and payment networks fell following the proposal
Opposing views	Banking associations warn of reduced access to credit; supporters cite consumer relief

What This Means For Consumers

The debate centers on weather temporary relief from high interest would lift household finances or whether it would curtail access to affordable credit. If lenders constrain lending, families could become more reliant on alternative, often more costly financing options.The policy’s success may hinge on balancing immediate relief with long-term credit availability and financial stability.

Disclaimer: financial policy changes can affect credit access. Consult a qualified financial advisor for guidance tailored to your situation.

evergreen insights

Looking ahead, policymakers will weigh the short-term benefits of easing debt service against the longer-term need to sustain a robust credit market. Lessons from past credit-control measures suggest that well-designed policies paired with targeted relief and stronger borrower protections can achieve consumer goals without undermining lender capacity.

Readers: as this story unfolds, consider how temporary caps might interact with rising inflation, wage growth, and digital payment adoption. the balance between consumer relief and credit accessibility remains a central question for households and lenders alike.

Engage With The Story

Do you think a temporary cap on credit card interest would help most households in the near term? Why or why not?

What alternative policies could protect consumers without restricting access to credit?

Share your thoughts in the comments below, and stay with us for continuous updates as the policy framework develops.

For additional background, see reports from major business outlets covering the policy debate and market responses. CNBC and BBC provide ongoing coverage of the discussions and market implications.

>Credit supply could shrink by up too 80% Lenders would face a drastic reduction in net interest margin, forcing them to tighten underwriting standards or exit the market. Consumer costs would rise elsewhere With credit unavailable, consumers may turn to high‑cost payday loans, auto‑title loans, or unregulated “buy‑now‑pay‑later” platforms. Bank profitability would be hit hard JPMorgan’s credit‑card division contributed $12.4 B in net interest income in 2025—roughly 6% of total bank earnings. A 10% cap could slash this revenue by 40‑50%. Potential spillover to other loan products To offset losses, banks may raise rates on mortgages, auto loans, and small‑business lines of credit.

How a 10% Cap Could Cut Credit for 80% of Americans

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jpmorgan CEO Jamie Dimon’s Warning on Trump’s 10% Credit Card Rate Cap

Published on archyde.com – 2026/01/22 11:30:01

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What Is the 10% Credit Card Rate Cap?

• Policy proposal: Former President Donald Trump has advocated capping all revolving credit‑card aprs at 10% nationwide.
• Legislative status: The cap is currently being debated in the Senate Finance Committee, with a public hearing scheduled for March 2026.
• Current market reality: As of Q4 2025, the average credit‑card APR hovered around 18.7% (Federal Reserve, 2025 Credit Card Rate Survey).

Dimon’s Core Argument: “An Economic Disaster”

Dimon’s Claim	Economic Rationale
Credit supply could shrink by up to 80%	Lenders would face a drastic reduction in net interest margin, forcing them to tighten underwriting standards or exit the market.
Consumer costs would rise elsewhere	With credit unavailable,consumers may turn to high‑cost payday loans,auto‑title loans,or unregulated “buy‑now‑pay‑later” platforms.
bank profitability would be hit hard	JPMorgan’s credit‑card division contributed $12.4 B in net interest income in 2025—roughly 6% of total bank earnings. A 10% cap could slash this revenue by 40‑50%.
Potential spillover to other loan products	To offset losses, banks may raise rates on mortgages, auto loans, and small‑business lines of credit.

How a 10% Cap Could cut Credit for 80% of Americans

1. Margin compression:

• Current average cost of funds for banks is ~4.5% (Fed Funds Rate, 2025).
• A 10% APR leaves only ~5.5% spread for operational costs, risk‑based pricing, and profit.

2. Risk‑based pricing disappears:

• High‑risk borrowers (sub‑prime, limited credit history) currently receive APRs of 22‑28% to offset default risk.
• A uniform 10% rate forces lenders to either absorb losses or exclude high‑risk segments.

3. Lender exit:

• Historical precedent: When the 1970s credit‑card interest‑rate ceiling (15%) was introduced, over 30% of issuers exited the market within two years (CFPB, 1973‑1975 study).

4. Credit‑access inequality:

• Low‑income households, representing ~45% of credit‑card users, would face the steepest reductions in available credit lines.

Potential Macro‑Economic impacts

• Consumer spending slowdown:
• Credit cards fund ~20% of discretionary retail sales. A contraction in available revolving credit could shave up to 1.2% off GDP growth (Brookings Institute, 2025 forecast).

• Higher default rates on alternative finance:
• Shift to payday lenders historically results in default rates 3‑4× higher (National Consumer Law Center, 2024).

• Bank‑sector stress:
• Reduced net interest income would tighten capital ratios, perhaps triggering a tier‑1 capital shortfall for smaller regional banks that rely heavily on credit‑card portfolios.

Real‑World Examples Illustrating the Risks

Situation	Outcome	Relevance to 10% Cap
2009 “Interest‑rate Cap” on sub‑prime mortgages (U.S. Federal Reserve)	Lenders curtailed new sub‑prime loans, pushing borrowers to unregulated lenders.	Demonstrates how caps on high‑risk credit can reduce legitimate credit availability.
Australia’s 15% credit‑card ceiling (2010‑2014)	Credit‑card market share fell by 22%; consumer reliance on “pay‑day” loans rose 15%.	Parallel case where a modest ceiling triggered market distortion.
India’s 13% credit‑card “Regulation” (2022)	Banks reduced credit limits for small‑business owners, forcing many to seek informal financing.	Shows cross‑border impact of low‑rate caps on small‑business credit.

Practical Tips for Consumers and Small Businesses

• Diversify credit sources: Keep a mix of revolving and installment credit to reduce reliance on any single product.
• Monitor credit‑card balances: Aim to keep utilization below 30% to maintain a strong credit score, which can help secure alternative financing.
• Explore fintech options early: Some fintech lenders are preparing “cap‑compliant” products with lower APRs but no hidden fees—compare APR,fees,and credit limits rigorously.
• Advocate for flexible caps: Join industry groups (e.g., American Bankers Association) pushing for risk‑based rate structures rather than flat caps.

Policy Alternatives That Preserve Credit Access

1. Tiered APR caps (e.g., 10% for borrowers with 750+ FICO, 15% for 700‑749, 20% for sub‑prime).
2. Profit‑share models: Lenders could receive a small “credit‑access fee” from the treasury to offset reduced margins while keeping rates low.
3. Targeted subsidies: Direct government subsidies for low‑income borrowers to offset higher APRs without forcing lenders to cut credit.

Key Takeaways for Stakeholders

• For regulators: A flat 10% cap risks unintended credit‑access contraction; consider data‑driven, risk‑adjusted caps.
• For banks: Prepare stress‑test scenarios that model a 10% APR surroundings; identify which segments may need to be scaled back.
• For consumers: Stay vigilant about credit‑card terms, and plan for alternative financing if market conditions tighten.

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All data referenced are from publicly available sources up to december 2025, including Federal Reserve reports, CFPB studies, Brookings Institute forecasts, and reputable industry analyses.