BofA and Citi Explore 10% Credit Cards to Address Trump Interest Rate Cap

Why Are Banks Considering 10% Credit Cards?

Major U.S. banks are exploring whether new credit card products with interest rates capped at 10% could assist address pressure from President Donald Trump, who has called for a temporary nationwide ceiling on card rates. According to a Reuters report, Bank of America is reviewing options to introduce such cards, while Citigroup is also weighing similar products, Bloomberg News reported.

The discussions are unfolding as Trump pushes Congress to approve a one-year cap on credit card interest rates, an idea he revived earlier this month as part of a broader effort to respond to voter concerns over household debt and the rising cost of living. While neither bank has confirmed specific plans, the prospect of no-frills cards at lower rates has emerged as one possible compromise.

Citigroup declined to comment, while has not publicly detailed how such cards would be structured. Shares of both lenders rose following the reports, with Bank of America up about 1.1% and Citi nahead 2% higher in later thannoon trading.

Investor Takeaway

What Is Trump Proposing, and How Likely Is It?

to ask Congress to approve a 10% cap on credit card interest rates for one year. He first floated the idea earlier this month, though the White House has not outlined how such a cap would be enforced or what exemptions, if any, might apply.

Analysts and industry groups have said legislation would be required to impose a nationwide cap, making passage uncertain given divisions in Congress. Some market participants view that uncertainty as a reason are considering alternative responses, including limited-scope products that comply with the proposed rate without applying it across entire card portfolios.

Several executives have warned that a broad cap would restrict lending and weigh on economic activity. Bank of America Chief Executive Brian Moynihan has said the proposal would limit access to credit, while Citigroup Chief Executive Jane Fraser has cautioned it would affect consumer spending and growth.

Why Credit Cards Are a Flashpoint

Credit cards remain a major source of earnings for U.S. banks, with lenders charging higher rates to offset the unsecured nature of the loans and the risk of default. That profitability has made the business a focal point in debates over consumer costs and bank margins.

has been among the most outspoken critics of a rate cap. Speaking at the World Economic Forum in Davos, he said such a move would sharply reduce access to credit. “It would remove credit from 80% of Americans, and that is their back-up credit,” Dimon said.

Trump, speaking separately at the identical event, repeated his call for a cap. “I am asking Congress to cap credit card interest rates at 10% for one year,” he said, adding that high card balances have made it harder for households to save for down payments. He also claimed profit margins for credit card companies exceed 50%.

Investor Takeaway

How the Industry Is Responding

Banking strongly, arguing a cap would hurt everyday consumers by limiting access to credit. Wall Street analysts have echoed that view, noting that sweeping changes would likely face legal and political hurdles.

Some executives have floated the idea of testing caps on a limited basis. Dimon suggested the government could force banks to apply the cap in two states as an experiment, naming Vermont and Massachusetts, a comment that drew laughter from the audience. Both states are represented by senators who have long supported interest-rate limits.

Others have pointed to narrower options, including lower-rate cards with no rewards or reduced credit limits. Analysts say such products could assist banks show responsiveness while preserving the economics of premium cards.

Market participants broadly expect Congress to move sluggishly, if at all. “The president is asking Congress to pass legislation, so he’s not going to try to personally set credit rates,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management. “That makes it highly unlikely we’ll view a 10% cap put in place anytime soon.”

What Comes Next for Banks and Borrowers

For now, Trump’s proposal has injected uncertainty into a core consumer-lending market without clear guidance on enforcement or scope. U.S. banks are weighing whether limited product changes can reduce political heat while avoiding a sharp pullback in credit.

Even if a nationwide cap does not pass, the debate has already forced lenders to defend pricing practices and consider alternative offerings. As mid-term elections approach, pressure on banks to address household debt is likely to persist, keeping credit card rates in the political spotlight.