Donald Trump's assault on the two primary profit drivers of bank credit card businesses is compelling Wall Street to simultaneously brace for a potential conflict while scrambling to identify potential "olive branches" they can offer.
According to individuals familiar with the matter, although bank executives privately resent Trump's recent vehement criticism, some are already contemplating measures such as issuing a credit card with an interest rate cap set at 10%. Others are exploring promotional tactics, offering customers temporary interest rate relief.
However, industry insiders indicate that if these attempts to appease Trump with milder alternatives prove ineffective, the banking sector can always revert to its standard playbook—intensifying lobbying efforts, launching consumer-facing advertising campaigns, and initiating lawsuits.
Trump recently publicly demanded on social media that credit card issuers cap interest rates at 10% for one year, sparking a wave of discussion. On Tuesday, he escalated his offensive, calling on lawmakers to support a legislative proposal named the Credit Card Competition Act. This bipartisan bill directly targets the nearly $200 billion in swipe fees that banks and payment companies collect from merchants annually.
"All options are on the table," Jeremy Barnum, Chief Financial Officer of JPMorgan Chase & Co., stated on Tuesday, adding that if a rate cap policy were implemented, "it would be very bad for consumers, very bad for the economy."
Bank executives are under pressure to rapidly formulate a response—not only because Trump claims banks would violate some unspecified law if they fail to significantly reduce rates by January 20, but also because the banking industry has begun disclosing 2025 financial results, with JPMorgan leading the way by reporting earnings on Tuesday.
Some analysts predict that a 10% credit card interest rate cap could erase profits and have already grilled JPMorgan executives on countermeasures and the potential costs associated with such a cap. Other major banks, including Citigroup, Bank of America, and Wells Fargo, are scheduled to report their earnings on Wednesday.
