Credit Card Rate Cap: Banks Brace for Trump's Move

The clock is ticking for credit card companies as a deadline set by President Trump looms. The president has called for a 10% cap on credit card interest rates, but with just days left, there's still a lot of uncertainty about what will happen next. The White House hasn't shared many details about how this cap will be enforced or what will happen to companies that don't comply. Press Secretary Karoline Leavitt has said that the president expects credit card companies to lower their rates, but she hasn't outlined any specific consequences for those that don't. Research suggests that capping credit card rates at 10% could save Americans around $100 billion in interest each year. However, it's not clear if this is a realistic goal or if it's just political talk. Some politicians have introduced bills to cap interest rates, but there hasn't been much support for these ideas. The Dodd-Frank Act, a law passed after the 2008 financial crisis, makes it difficult for federal regulators to set limits on interest rates. This means that without a new law or executive order, Trump may have to rely on political pressure to get credit card companies to lower their rates.Banks and credit card companies have been scrambling to figure out what to do. Some have pushed back against the idea of a rate cap, while others have said they're willing to work with the administration. JPMorgan, one of the biggest credit card companies, has said it will fight to stop the Trump administration from capping rates. Citigroup, on the other hand, has said it's open to collaborating with the administration on ways to make credit more affordable. Not all companies are waiting to see what happens. Fintech company Bilt has already launched a new set of credit cards with a 10% interest rate cap on new purchases for a year. This could be an example of how the credit card industry can meet the White House's demands without fundamentally changing their business model. It's still unclear what will happen next, but one thing is certain: the credit card industry is in for a wild ride.