“There is a very keen understanding that this would have the opposite impact of what the actual intent would be, and that there are better ways to go about it, and we’re very happy and continue to work on providing them,” Fraser said during an interview with CNBC.
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.
A cap would not be good for the economy, Fraser said, because it would restrict access to credit, allowing only the rich to have access to credit cards and denying credit to those who need it the most.
In addition, the macro effects of a cap would be “worrying,” Fraser said. Spending would be curtailed in the absence of credit cards, and sectors that rely on card spend, such as airlines, retailers, hotels and restaurants, would be impacted by that decline and by the loss of the profitability they gain from credit card partnerships.
“Let’s make sure that we extend access to credit, we don’t restrict it,” Fraser said.
Trump called for a one-year, 10% cap on credit card interest rates Jan. 9.
“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 a post on Truth Social.
PYMNTS reported at the time that Trump had floated the idea of a temporary interest rate cap during the 2024 presidential campaign.
JPMorgan Chase Chief Financial Officer Jeremy Barnum said Jan. 13 that the banking industry could fight proposed credit card price caps.
“If you wind up with weakly supported directives to radically change our business that aren’t justified, you have to assume that everything’s on the table,” Barnum said during a call with reporters to discuss the bank’s earnings. “We owe that to shareholders.”
