JPMorgan Executive Warns Trump’s Credit Card Interest Rate Cap May Harm the Economy

JPMorgan CFO Jeremy Barnum recently expressed concerns regarding President Donald Trump’s proposal to impose a 10% cap on credit card interest rates. He warned that this initiative could have detrimental effects on the broader economy and limit access to credit for many consumers.

During a call associated with the bank’s fourth-quarter earnings release, Barnum stated, “What’s actually simply going to happen is that the provision of the service will change dramatically. Specifically, people will lose access to credit, like on a very, very extensive and broad basis, especially the people who need it.” He emphasized that this could lead to “severely negative consequences for consumers and, frankly, probably also a negative consequence for the economy as a whole.”

TRUMP’S PROPOSED CREDIT CARD INTEREST RATE CAP COULD CURB ACCESS FOR MILLIONS OF AMERICANS: REPORT

Barnum also highlighted that the proposed cap would pose a “significant” challenge for JPMorgan’s credit card business. “I think it should be obvious that that would also be bad for us. I’m not going to get into quantifying, but in a narrow sense, this is a big business for us. It’s a very competitive business, but we wouldn’t be in it if it weren’t a good business for us,” he explained.

A customer uses a credit card at a store. (Robert Nickelsberg/Getty Images)

In light of these developments, banks are cautioning consumers that a rate cap could lead to stricter credit card issuance policies. According to LendingTree chief consumer finance analyst Matt Schulz, banks “would be less willing to give credit cards to anyone who doesn’t have great credit,” and the rewards that many consumers enjoy could be significantly diminished. This shift could ultimately result in reduced consumer spending, further impacting the economy.

Barnum’s remarks align with previous warnings that Trump’s proposed 10% cap on credit card interest rates could restrict access to credit cards for numerous American consumers, particularly affecting small businesses. On Friday, Trump reiterated his desire to impose a one-year 10% cap on credit card interest rates, aiming to shield consumers from exorbitant interest rates that can exceed 20% for some borrowers.

President Donald Trump called for a one-year cap on credit card interest rates, blaming high costs on the Biden administration. (Brent Lewin/Bloomberg via Getty Images)

EX-TRUMP ADVISOR RAISES ALARM OVER BIPARTISAN CREDIT CARD PLAN THAT COULD HURT AMERICANS

This proposal follows a bill introduced last year by Senators Bernie Sanders and Josh Hawley, which aimed to cap credit card APRs at 10%. Richard Hunt, executive chairman of the Electronic Payments Coalition (EPC), warned that their analysis indicated that nearly every credit card account linked to a credit score below 740 would be closed or severely restricted if a 10% interest rate cap were enacted.

People pass the JPMorgan Chase corporate headquarters in Manhattan, May 20, 2015. (Reuters/Mike Segar/File)

This change could affect between 175 million to 190 million American cardholders, particularly impacting lower- and middle-income households. Data from the Federal Reserve Bank of New York indicates that the average credit score for low-income Americans is 658, while it stands at 735 for middle-income households.

Schulz noted that while the outcome remains uncertain, he pointed to the existing 18% rate cap on federal credit union credit cards, which still offer rewards. “They’re not as lucrative as what you’d find on an Amex Platinum or Chase Sapphire Reserve, but they’re still significant,” he said. However, he believes that 0% balance transfer credit card offers would likely disappear if the proposed cap were enacted.

“Banks simply wouldn’t be willing to take those kinds of risks under a restrictive rate cap, especially at 10%,” he added. Despite the popularity of such proposals, they often limit access to credit and can significantly reduce rewards.

A 2024 LendingTree survey revealed that three in four credit card holders support these caps, highlighting the ongoing debate surrounding credit card interest rates and consumer protection.

FOX Business’ Eric Revell contributed to this report.

JPMorgan CFO Jeremy Barnum recently expressed concerns regarding President Donald Trump’s proposal to impose a 10% cap on credit card interest rates. He warned that this initiative could have detrimental effects on the broader economy and limit access to credit for many consumers.

During a call associated with the bank’s fourth-quarter earnings release, Barnum stated, “What’s actually simply going to happen is that the provision of the service will change dramatically. Specifically, people will lose access to credit, like on a very, very extensive and broad basis, especially the people who need it.” He emphasized that this could lead to “severely negative consequences for consumers and, frankly, probably also a negative consequence for the economy as a whole.”

TRUMP’S PROPOSED CREDIT CARD INTEREST RATE CAP COULD CURB ACCESS FOR MILLIONS OF AMERICANS: REPORT

Barnum also highlighted that the proposed cap would pose a “significant” challenge for JPMorgan’s credit card business. “I think it should be obvious that that would also be bad for us. I’m not going to get into quantifying, but in a narrow sense, this is a big business for us. It’s a very competitive business, but we wouldn’t be in it if it weren’t a good business for us,” he explained.

A customer uses a credit card at a store. (Robert Nickelsberg/Getty Images)

In light of these developments, banks are cautioning consumers that a rate cap could lead to stricter credit card issuance policies. According to LendingTree chief consumer finance analyst Matt Schulz, banks “would be less willing to give credit cards to anyone who doesn’t have great credit,” and the rewards that many consumers enjoy could be significantly diminished. This shift could ultimately result in reduced consumer spending, further impacting the economy.

Barnum’s remarks align with previous warnings that Trump’s proposed 10% cap on credit card interest rates could restrict access to credit cards for numerous American consumers, particularly affecting small businesses. On Friday, Trump reiterated his desire to impose a one-year 10% cap on credit card interest rates, aiming to shield consumers from exorbitant interest rates that can exceed 20% for some borrowers.

President Donald Trump called for a one-year cap on credit card interest rates, blaming high costs on the Biden administration. (Brent Lewin/Bloomberg via Getty Images)

EX-TRUMP ADVISOR RAISES ALARM OVER BIPARTISAN CREDIT CARD PLAN THAT COULD HURT AMERICANS

This proposal follows a bill introduced last year by Senators Bernie Sanders and Josh Hawley, which aimed to cap credit card APRs at 10%. Richard Hunt, executive chairman of the Electronic Payments Coalition (EPC), warned that their analysis indicated that nearly every credit card account linked to a credit score below 740 would be closed or severely restricted if a 10% interest rate cap were enacted.

People pass the JPMorgan Chase corporate headquarters in Manhattan, May 20, 2015. (Reuters/Mike Segar/File)

This change could affect between 175 million to 190 million American cardholders, particularly impacting lower- and middle-income households. Data from the Federal Reserve Bank of New York indicates that the average credit score for low-income Americans is 658, while it stands at 735 for middle-income households.

Schulz noted that while the outcome remains uncertain, he pointed to the existing 18% rate cap on federal credit union credit cards, which still offer rewards. “They’re not as lucrative as what you’d find on an Amex Platinum or Chase Sapphire Reserve, but they’re still significant,” he said. However, he believes that 0% balance transfer credit card offers would likely disappear if the proposed cap were enacted.

“Banks simply wouldn’t be willing to take those kinds of risks under a restrictive rate cap, especially at 10%,” he added. Despite the popularity of such proposals, they often limit access to credit and can significantly reduce rewards.

A 2024 LendingTree survey revealed that three in four credit card holders support these caps, highlighting the ongoing debate surrounding credit card interest rates and consumer protection.

FOX Business’ Eric Revell contributed to this report.