In a stark warning, the chief executive of JPMorgan Chase, one of the world’s largest banks, has cautioned that US President Donald Trump’s proposal to limit credit card interest rates to 10% would be an “economic disaster” that could severely restrict access to credit for the majority of Americans.
Jamie Dimon, the JPMorgan CEO, stated that such a cap would have far-reaching consequences, hitting not just credit card companies, but also restaurants, retailers, travel firms, and even municipalities. He argued that the move would cut off credit for 80% of Americans, depriving them of their “backup credit.”
Trump had recently called for a one-year 10% cap on credit card interest rates, reviving a proposal he had made during his 2024 presidential election campaign. The president claimed that credit card companies were “ripping off” the American public and that he would no longer let this happen.
However, Dimon dismissed the plan as “drastic,” warning that it would have devastating effects. He suggested that if Trump were to implement the cap, it should be trialled first in the states of Vermont and Massachusetts, home to Senators Bernie Sanders and Elizabeth Warren, who have previously supported such measures.
The JPMorgan boss argued that the “people crying the most” would not be the credit card companies, but rather the businesses and institutions that rely on timely payments from consumers. He warned that the cap could lead to missed utility and other payments, causing widespread disruption.
Dimon’s comments echo the concerns raised by US banking associations, which have stated that capping interest rates would make it harder for people to access credit and be “devastating” for millions of families and small businesses.
The average credit card interest rate in the US currently stands at around 20%, significantly higher than the proposed 10% cap. Trump’s plan, if implemented, would represent a drastic reduction that could have far-reaching consequences for the country’s financial landscape.
As the debate over credit card interest rates continues, the warning from the JPMorgan CEO highlights the potential risks and unintended consequences that could arise from such a policy change. Policymakers will need to carefully weigh the potential benefits against the potential economic disruption before considering any such measures.
