- President Donald Trump wants Congress to pass a 10% cap on credit card interest.
- The banking industry opposes the idea, first raised by Trump in the 2024 campaign.
- JPMorgan Chase CEO Jamie Dimon says a cap would lead to economic disaster.
Amid a one-hour talk that touched on a wide range of issues at the World Economic Summit in Davos, Switzerland, President Donald Trump said he is asking Congress to place a temporary limit on how much interest can be charged by U.S. credit card issuers.
The move, according to the president, is aimed at addressing housing affordability issues.
“One of the biggest barriers to savings or a down payment has been surging credit card debt,” Trump said Wednesday. “I’m asking Congress to cap cc interest rates at 10% for one year. This will help millions of Americans save for a home.”
Trump, who raised the idea of the cap during his 2024 campaign and revisited the issue in social media postings earlier this month, said financial institutions are charging interest on outstanding credit card debt as high as 32% and that “profit margins for credit card companies now exceed 50%.”
What the banking industry has to say
While a handful of lawmakers from both sides of the aisle have expressed interest in supporting legislation to institute a temporary cap on credit card rates, the leader of the largest bank in the U.S. pilloried the idea in comments made during a panel discussion at the Davos event.
“It would be an economic disaster,” JPMorgan Chase CEO Jamie Dimon said. “In the worst case, you’d have a drastic reduction of the credit card business” for 80% of Americans.
Members of the U.S. banking industry have pushed back strongly against the move, according to a report from Reuters, arguing it would limit credit access for everyday consumers. Meanwhile, Wall Street analysts suggested the legislation has slim odds of passage, with Democrats and Republicans divided over supporting it.
Dimon drew laughs from the Davos audience in a friendly shot at Sen. Bernie Sanders, I-Vt., and Sen. Elizabeth Warren, D-Mass., that did not mention the U.S. lawmakers by name. Both Sanders and Warren have previously voiced their support for rate cap legislation.
“I think we should test it,” Dimon said. “The government can do it, they should force all the banks to do it in two states — Vermont and Massachusetts — and see what happens.”
A statement from the American Bankers Association, released earlier this month, argued a 10% rate cap would create new harms for consumers and reduce credit availability.
“We share the president’s goal of helping Americans access more affordable credit,” the statement reads. “At the same time, evidence shows that a 10% interest rate cap would reduce credit availability and be devastating for millions of American families and small businesses who rely on and value their credit cards, the very consumers this proposal intends to help. If enacted, this cap would only drive consumers toward less regulated, more costly alternatives. We look forward to working with the administration to ensure Americans have access to the credit they need.”
According to tracking by LendingTree, updated earlier this month, the average annual percentage interest rate on new credit card offers stood at 23.79%, with rates ranging from just over 20% to 27.39%.
Matt Schulz, LendingTree’s chief consumer finance analyst, said the January rate was the lowest since March 2023 and down from the all-time average high of 24.92% in September 2024.
At the current average interest of 23.79%, a credit card holder carrying a balance of $7,000 who paid $250 a month would take 41 months to pay off including $3,314 in interest.
Schulz said that while the Federal Reserve’s decisions to reduce its benchmark interest rate at each of its last three meetings of 2025 helped bring down the average interest charged on credit card debt, “interest rates are still sky-high, and no one should expect that to change anytime soon.”
“As with the Fed rate cuts in September, October and December, any further Fed moves would likely be small, reducing rates by a quarter-point or a half-point at most,” Schulz said in the Jan. 9 report. “Given that, it would be wise for consumers to expect credit card interest rates to remain relatively high for the foreseeable future.”
According to the latest national data from the Federal Reserve Bank of New York, U.S. credit card balances rose by $24 billion from the previous quarter and stood at $1.23 trillion at the end of the third quarter of 2025, an all-time high.