Shares of major credit card companies and banks dropped sharply following President Donald Trump’s proposal to cap credit card interest rates at 10% for a year, starting January 20. Visa Inc. fell 4.46%, Mastercard slipped 3.76%, and JPMorgan Chase declined 4.19% in Tuesday trading.
Trump announced the rate cap on Truth Social last Friday, prompting strong reactions from bank executives and industry experts, who warn the measure could reduce the number of available credit card accounts and put a damper on U.S. consumer spending. According to these insiders, capping credit card rates at 10% would make many accounts unprofitable, leading issuers to withdraw them from the market.
JPMorgan’s top leadership, including CEO Jamie Dimon, voiced concerns that the proposed ceiling would harm consumers.
“It would be very bad for consumers, very bad for the economy,” said Jeremy Barnum, JPMorgan’s Chief Financial Officer, during the bank’s earnings call on Tuesday. Barnum noted the bank would be forced to reduce available credit if the cap is enacted, stating, “Our belief is that actually this will have the exact opposite consequence to what the administration wants.”
The Federal Reserve reported the average U.S. credit card interest rate stood at 20.97% in November.
