JPMorgan CEO Jamie Dimon said President Donald Trump’s plans to cap credit card interest rates would be an “economic disaster” for Americans.
Speaking at the World Economic Forum in Davos, Switzerland, Dimon outlined why the president’s calls to introduce a 10 percent cap on credit card interest rates for one year is a bad idea while laying out who would be affected.
“Our business we would survive it, [but] in the worst case, you’re going to have to have a drastic reduction of the credit card business,” Dimon said. “I mean drastic, I don’t mean like 10 percent, I mean like 80 percent—it would remove credit from 80 percent of Americans, and that is their backup credit.”
Dimon went on to wryly suggest how Trump could test his idea to limit interest rates, which card issuers rely on for profit. “They should force all the banks to do it in two states, Vermont and Massachusetts, and see what happens,” Dimon said.
Progressive Sens. Bernie Sanders of Vermont and Massachusetts’s Elizabeth Warren are among those who have previously voiced support for introducing a cap on interest rates.
“It will learn a real lesson, and the people crying the most won’t be the credit card companies,” Dimon added. “They’ll be the restaurants, the retailers, the travel companies, the schools, the municipalities, because people miss their water payments, their this payment and that payment, it would be something else to watch.”
The 79-year-old president posted on Truth Social earlier this month that he wants to stop people from being “ripped off” by credit card companies charging interest rates of 20 to 30 percent.
However, the calls appear to be more of a pipe dream that Trump impulsively shared on social media rather than a well-thought-out policy. There is no clear way for his administration to simply impose interest caps, and the idea has little support in Congress.
“I’ve not seen anyone really—Republicans, senators, businesses, banks, credit unions, community banks—anyone think it’s a good idea,” Dimon added at Davos.
Michael Miller, an analyst at Morningstar, a financial services firm, estimated that Capital One would lose about half of the $22 billion it made in interest from its credit card business in 2024 under Trump’s plans.
“The lending model just doesn’t work in terms of mass-market credit cards at a 10 percent cap on interest rates,” Miller told The New York Times.
The Daily Beast has contacted the White House for comment.
