Bank of America and Citi Consider Offering Credit Cards With 10% Interest Rate

Bank of America and Citigroup are reportedly considering offering credit cards with a 10% interest rate in response to President Donald Trump’s demand for a cap on rates.

This is one of multiple options that banks are considering, separately, after Trump made that demand, Bloomberg reported Thursday (Jan. 22), citing unnamed sources.

Reached by PYMNTS, Citigroup declined to comment on the report.

Bank of America did not immediately reply to PYMNTS’ request for comment.

Bank of America CEO Brian Moynihan told Bloomberg TV Thursday that Trump’s proposed 10% credit card interest cap would slow consumer spending and limit credit availability.

However, Moynihan said the affordability issues behind the proposal are legitimate and that the bank has been in talks with the White House on the subject.

“If you actually make this a policy, it can reallocate credit,” Moynihan said. “That will slow down spending, it will slow down credit availability, and that might not be what you’re trying to achieve.”

Citigroup Chair and CEO Jane Fraser told CNBC Tuesday (Jan. 20) that Trump’s proposed cap on credit card interest rates would restrict access to credit, allowing only the rich to have access to credit cards, and would curtail spending, impacting the sectors that rely on card spend.

Fraser said that while Trump is right to focus on affordability, banks already offer “low-cost, no-frill” products that provide consumers with access to credit.

“Let’s make sure that we extend access to credit, we don’t restrict it,” Fraser said.

It was reported Wednesday (Jan. 21) that JPMorgan Chase CEO Jamie Dimon said a 10% credit card interest rate cap would be catastrophic.

“It would remove credit from 80% of Americans, and that is their back-up credit,” Dimon said.

Trump called for a one-year, 10% cap on credit card interest rates in a Jan. 9 post on Truth Social.

“Please be informed 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…,” Trump wrote in the post.

The proposal drew criticism from a collection of industry groups, including the Bank Policy Institute, American Bankers Association, Consumer Bankers Association, Financial Services Forum and Independent Community Bankers of America.