DAVOS, Switzerland — Wall Street’s biggest banks are resisting President Donald Trump’s proposed 10% credit card cap as executives gather Wednesday at the World Economic Forum, warning the limit could choke off unsecured credit for millions of Americans. Bank leaders say they share the White House’s affordability goals, but they are urging narrower fixes that do not impose a blanket ceiling, Jan. 21, 2026.
What the 10% credit card cap would change
Trump has cast the 10% credit card cap as a one-year reset for consumers facing borrowing costs that often exceed 20%. He set Jan. 20 as a deadline for issuers to lower rates, but the administration has not detailed how it would compel compliance or whether any cap would require legislation. CBS News reported that most large issuers have not broadly shifted their APRs as the deadline arrived.
Even without a cap, the pressure on household budgets is clear: credit card balances hit about $1.23 trillion in the third quarter of 2025, according to New York Fed data.
Wall Street’s warning: a cap could backfire
JPMorgan Chase CEO Jamie Dimon said the 10% credit card cap would be an “economic disaster,” arguing that risk-based pricing is what keeps unsecured credit available to a wide range of borrowers. “Eighty percent of Americans will lose access to credit if this moves forward,” Dimon said. Reuters reported that bankers say a hard ceiling would likely tighten underwriting and shrink credit lines, pushing higher-risk borrowers out of the market.
Citigroup CEO Jane Fraser, speaking to CNBC from the conference, said she does not expect Congress to approve rate caps. Bank executives are also trying to steer the administration toward alternatives tied to housing, retirement policy and product redesign, according to a separate Reuters report.
What banks say they can do instead
No-frills cards: Lower-rate products that drop perks and tighten eligibility to make pricing closer to a 10% credit card cap workable for some borrowers.
Hardship programs: Temporary rate cuts for customers who are paying down balances or facing financial shocks, rather than a blanket cap.
Housing-linked savings tweaks: Proposals that expand help for down payments without rewriting credit-card pricing.
The World Economic Forum’s annual meeting runs Jan. 19-23, and its official event page underscores how quickly policy ideas can turn into market-moving signals during the week.
The debate predates Trump’s Davos push
A 10% credit card cap has been debated in Washington well before this year’s deadline. In 2025, Sen. Bernie Sanders introduced the 10 Percent Credit Card Interest Rate Cap Act, which would temporarily cap credit card interest rates at 10%.
Advocates cite research arguing that rate caps could save households billions, including analysis published by the Vanderbilt Policy Accelerator. Banks argue the same cap would ration credit, and they are using Davos to press their case — and to sell alternatives — as the administration decides whether to pursue the 10% credit card cap through Congress or shift toward narrower industry-led changes.
With the White House still short on enforcement details, the next test is whether Wall Street’s alternatives gain traction before the cap hardens into legislation.
