JPMorgan CFO warns Trump's proposed credit card cap could cause people to 'lose access to credit'

JPMorgan CFO Jeremy Barnum warned Tuesday that President Donald Trump's push to put a 10% cap on credit card interest rates could hurt the broader economy and reduce access to credit.

"What's actually simply going to happen is that the provision of the service will change dramatically. Specifically, people will lose access to credit, like on a very, very extensive and broad basis, especially the people who need it," Barnum said during a call tied to the bank’s fourth-quarter earnings release. 

Barnum said this could create a "severely negative consequence for consumers and, frankly, probably also a negative consequence for the economy as a whole." 

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He also noted that this would also present a "significant" challenge for JPMorgan’s credit card business.

"I think it should be obvious that that would also be bad for us. I'm not going to get into quantifying, but in a narrow sense, this is a big business for us. It's a very competitive business, but we wouldn't be in it if it weren't a good business for us," he said. 

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Banks are essentially warning consumers that with the rate cap, they "would be less willing to give credit cards to anyone who doesn’t have great credit and that the rewards that people love so much would be dramatically reduced," according to LendingTree chief consumer finance analyst Matt Schulz, who noted that this could ultimately lead to less consumer spending, which could hurt the economy. 

Barnum’s comments echo earlier warnings that Trump’s call for a 10% cap on credit card interest rates could impact access to credit cards for many American consumers while also impacting small businesses. 

On Friday, Trump declared that he wants to impose a 10% cap on credit card interest rates for one year starting on Jan. 20, saying he wants to prevent consumers from being "ripped off" by credit card issuers with interest rates that may exceed 20% for some borrowers. 

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The president's proposal follows the introduction of a bill last year by Sens. Bernie Sanders, I-Vt., and Josh Hawley, R-Mo., that would cap credit card APRs at 10%.

But Richard Hunt, executive chairman of the Electronic Payments Coalition (EPC), told reporters that EPC's analysis of a 10% credit card cap found that nearly every credit card account associated with a credit score below 740 would be closed or severely restricted if a 10% interest rate cap were implemented.

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That would impact 175 million to 190 million American cardholders who would lose access to their credit cards, primarily lower- and middle-income households. Data from the Federal Reserve Bank of New York found the average credit score for low-income Americans was 658 while it was 735 for middle-income households.

Schulz told FOX Business that it still isn’t entirely clear how this would all play out. He pointed to the rate cap of 18% on federal credit union credit cards, and they still offer rewards as an example. 

"They’re not as lucrative as what you’d find on an Amex Platinum or Chase Sapphire Reserve, but they’re still significant. Of course, the story would likely be different if the credit union cap was 10%, but credit unions are still proof that rewards and rate caps can coexist successfully," he said. 

However, he does believe that the 0% balance transfer credit card offers would vanish if the rate cap was implemented. 

"Banks simply wouldn’t be willing to take those kinds of risks under a restrictive rate cap, especially at 10%. That would be a big deal, although the interest paid under a 10% rate cap would be so much lower than what people are facing now that it would make those 0% deals less important," he added. 

The reason why politicians keep proposing them, even though they don’t often get anywhere, is because they are really popular despite that they limit access to credit and their rewards can be reduced dramatically. 

A 2024 LendingTree survey showed that three in four credit card holders support these caps. 

FOX Business' Eric Revell contributed to this report.