Bank of America weighs credit card with 10% rate as Trump calls for cap
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A credit card advertisement at a Bank of America branch in New York on Jan. 14. Photo: Michael Nagle/Bloomberg via Getty Images
Bank of America is weighing offering a credit card with a 10% interest rate cap for one year after President Trump backed a temporary ban on higher rates, according to a person familiar with the matter.
Why it matters: Trump shocked Wall Street by aligning with key Democrats on a policy proposal that would sharply limit how banks profit from credit card borrowers.
The intrigue: Bank of America hopes that by offering a credit card with a one-year 10% rate cap, "it could forgo the need for legislation," said the person, who's familiar with the bank's deliberations.
- "We definitely want to work with the administration and be solution-oriented," they said.
- It was not immediately clear how many customers would qualify for the card, what other benefits it would include.
- The bank is also engaging other major global banks on the topic, the person said.
The big picture: Bank of America CEO Brian Moynihan said Thursday in Davos at an Axios Live event that "we're all trying to work on something" that can improve the financial lives of customers.
- "How can you make potentially an ability to have a product which can provide a one‑year lift at a lower rate that people could access without repricing the whole book and deal with credit reallocation and everything?" he told Axios' Mike Allen and Courtenay Brown. "So we're all trying to noodle on that."
- The card under discussion would be part of the bank's effort to help customers dealing with affordability issues, the person familiar with the matter said.
Catch up quick: Trump said earlier this month on Truth Social that "we will no longer let the American Public be 'ripped off' by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more."
- He called for "a one year cap on Credit Card Interest Rates of 10%."
- Trump said the cap would be "effective January 20" and claimed lenders would be "in violation of the law" if they did not comply.
Yes, but: Wall Street has recoiled at the prospect of a legal limit on rates, arguing that it would reduce access to credit and rewards.
- JPMorgan Chase CEO Jamie Dimon said Wednesday in Davos that a 10% cap would be an "economic disaster."
- "In the worst case, you'd have to have a drastic reduction of the credit card business — I mean drastic," he said, predicting that "it would remove credit from 80% of Americans."
By the numbers: The average annual percentage rate on credit cards ballooned from 12.9% in 2013 to 22.8% in 2023, according to Consumer Financial Protection Bureau data published before Trump moved to shut down the agency.
Editor's note: This report was updated with detail on the length of the rate cap under discussion, and with other information throughout.
