How Banks Can Appease Trump On Credit-Card Rates

Banks are signaling that they can “appease” Trump on credit‑card rates mainly by creating narrow 10% APR products and marketing moves that look like compliance, while preserving high yields on most existing and new balances.

What Trump wants

• President Trump has called for a one‑year cap of 10% on credit‑card interest rates, framing it as relief from typical card APRs in the 20–30% range.

• He has shifted from hinting at executive‑action style pressure to saying he will ask Congress to legislate a cap, though the legal path and political appetite in Congress are unclear.

Banks’ core problem

• Credit‑card lending is one of the most profitable lines in consumer banking, with average APRs around 21% in late 2025 and sector profit margins several times the banking average.

• A broad, binding 10% cap would make large chunks of card portfolios unprofitable, especially subprime, and likely force tighter underwriting and cuts to rewards programs.

Likely appeasement strategies

• Issue special “10% cards”: Large banks like Bank of America and Citigroup are exploring or considering cards advertised at a 10% APR, widely seen as a response to Trump’s demand rather than a wholesale repricing of credit.

• Keep them narrow and selective: These low‑rate cards are expected to be limited to better‑credit customers, possibly temporary promotions, and structured so that most revolving balances still accrue higher rates or revert later.

• Use voluntary offers as political cover: By pointing to “Trump‑friendly” 10% products, banks can argue that government coercion is unnecessary and that the market is delivering relief on its own.

• Trade scope for flexibility: Industry groups are pushing the line that any broad cap would shrink access to credit and hurt the economy, implicitly offering targeted low‑rate products instead of universal controls.

What this means in practice

• For consumers, visible 10% cards may help a slice of prime borrowers but leave many higher‑risk or already‑indebted users paying today’s elevated rates.

• For Trump, even limited offerings let him claim progress on a campaign pledge without immediately forcing a systemic overhaul that could trigger a major fight with Wall Street and Congress.