Morgan Chase CEO Jamie Dimon suggested the trial of President Trump’s proposed credit card interest rate cap in the states of Vermont and Massachusetts.
Dimon made the proposal while attending the World Economic Forum in Davos, Switzerland on Wednesday, January 21st. During a panel discussion, he expressed his opinion on the President’s previous suggestion to cap credit card interest rates at 10% or lower within a year.
According to CNBC, several large American credit card lending institutions have not started lowering rates as the President mentioned starting from January 20th, but they have not disclosed whether they oppose the President’s proposal.
During last week’s earnings conference calls and private conversations, almost every bank expressed opposition to Trump’s executive order this month to voluntarily give up billions of dollars in revenue.
Dimon stated on Wednesday, “This would be an economic disaster.”
He said, “In the worst-case scenario, credit card operations for 80% of Americans would significantly shrink.”
The main argument of banks is that price controls would lead to many credit card customers’ accounts being canceled by lending institutions. Most banking industry analysts believe that legislation is needed to implement a nationwide cap on credit card interest rates.
Dimon subsequently mentioned that he has a “good idea” to help ease the controversy surrounding the proposed credit card interest rate cap. He suggested that the U.S. government first pilot this policy in two states.
Vermont and Massachusetts are the respective homes of Senators Bernie Sanders and Elizabeth Warren, who support a bill that sets the credit card interest rate cap at 10% for five years.
Dimon said, “The federal government should mandate all banks to implement interest rate caps in Vermont and Massachusetts and see what happens.” He added that JPMorgan Chase plans to submit an analysis report to the Trump administration on the consequences of a national credit card interest rate cap policy.
“I believe the government should not intervene too much in pricing of goods, but I have to accept reality,” Dimon said.
According to the latest data from the Federal Reserve, the average credit card interest rate is 22.30%, higher than the 16.28% in 2020. Groups with lower credit scores face even higher credit card rates.
Bankrate reports that individuals with lower credit scores may need to pay up to 36% interest rates. The average interest rate of general store credit cards exceeds 30%. Federal credit unions have their rates limited to 18% by law.
According to data from the New York Federal Reserve Bank as of the third quarter of 2025, Americans’ total credit card debt amounted to $1.23 trillion. With many Americans dipping into savings during the COVID pandemic, debt balances continue to rise. Currently, about 2.98% of credit card balances are in arrears.
A recent analysis by Vanderbilt University shows that setting a 10% credit card interest rate cap could save American households approximately $100 billion in interest payments annually. This could translate into a similar savings effect at the individual level.
However, for individuals with credit scores below 760, due to a significant drop in credit card business profits, issuing banks may require new annual fees or raise existing fees, resulting in an estimated $27 billion loss in benefits for this group.
According to a study by the Electronic Payment Association in the Missouri market, a 10% credit card interest rate cap would mean that over 80% of credit card accounts would become unusable. The study states that most accounts with credit scores below 740 would be closed.