Bank of America and Citigroup are reportedly exploring strategies to introduce new credit cards with a capped interest rate of 10%, a move aimed at meeting the expectations set forth by President Donald Trump. This development is outlined in a Bloomberg News report that cites sources familiar with the negotiations.
The discussion around this potential offering comes after Trump announced plans to request Congressional approval for a 10% interest rate cap on credit cards, intended to remain in effect for one year. It marks a significant shift in the financial sector, as industry leaders express concerns that implementing such a cap could lead to reduced lending activity and hinder economic growth.
Despite these warnings, some financial experts suggest that credit cards remain a highly lucrative product for banks, indicating that there may be room for lower interest rates without significantly impacting profitability. The potential card options being considered by Bank of America and Citigroup underscore the ongoing dialogue between regulatory demands and lending practices within the banking industry.
As of now, neither Bank of America nor Citigroup has responded to requests for comments regarding this matter. The outcome of these discussions could have lasting effects on both consumer credit markets and broader economic trends.
