By Al Edwards 

Looking to stimulate the United States’ economy and generate more consumer spending, President Donald Trump is calling for a big reduction in credit card rates in the United States.

However, the country’s biggest bank, JPMorgan Chase, disagrees with the president and is of the view that such a move will hurt banks and consumers.

“Instead of lowering the price of credit, we’ll simply reduce the supply of credit—and that will be bad for everyone. Our belief is that actions like this will have the exact opposite consequence to what the administration wants for consumers,” said JPMorgan Chase’s Chief Financial Officer, Jeremy Barnam. 

President Trump has lambasted the Chairman of the Federal Reserve, Jerome Powell, for not lowering the policy rate in a meaningful way and made it clear that he is not happy with him and that he has to go.

President Trump is demanding a one-year, 10 per cent cap on all credit card rates beginning from January 20, 2026, and if financial institutions refuse to comply, they will be “in violation of the law”. 

The average credit card rate in the US is 20 per cent. Credit card debt in the world’s biggest economy now stands at US$1.25 trillion.

Banks say that if President Trump were to push through a cap of 10 per cent on credit cards, it would cost them US$100 billion in lost revenue per year, according to researchers at Vanderbilt University.

Ted Rossman of Bankrate believes President Trump’s credit card move is all wrong.

He cautioned: “This could really backfire. Credit cards are unsecured debt. They’re not backed by a car or a house. Banks worry about people not paying them back, and a 10 per cent cap is so low that the risk assessment just wouldn’t work.”

The World Bank weighed in on lowering the interest rate, saying: “While some forms of interest rate caps indeed reduce lending rates and help to limit predatory practices by formal lenders, they come with unintended side-effects, including increases in non-interest fees and commissions, reduced price transparency and lower credit supply on loan approval rates for small and risky borrowers.”

President Trump said earlier today, “We should have lower rates. Jamie Dimon probably wants higher rates, maybe he makes more money that way.

“I think people who are paying a 25 per cent interest rate on their credit cards should be protected. When you have people like Jamie Dimon charging people 28 to 32 per cent, no, I’ll help those people.”

Republican House Speaker Mike Johnson said in a press conference on Tuesday, “You gotta be very careful if you go forward in that, in our zeal to bring down costs, you don’t want to have negative secondary effects of that.

“The problem is, if you do that, then the credit card companies…they would just stop lending money, and maybe they cap what people are able to borrow at a very low amount. It’s something that we’ve got to be very deliberate about.”