Bank of America: Credit Card Push to Double Consumer Profits

Bank of America is considering a significant shift in its credit card offerings, potentially launching a new card with a January 23, 2026 report indicating the bank is weighing options to comply with President Trump’s call for a temporary cap on credit card interest rates. The proposal, which aims to limit rates to 10%, has sent ripples through the banking sector, raising questions about profitability and access to credit.

Trump Administration’s Proposal and Industry Response

President Trump has publicly accused credit card issuers of “ripping off” consumers with interest rates reaching as high as 30% for those carrying balances. He initially proposed a one-year cap on credit card interest rates at 10% earlier this month and stated his intention to work with Congress to deliver credit card interest relief for Americans. However, as of today, February 5, 2026, the Trump administration has not provided specific details on how such a cap would be enforced, leaving banking executives uncertain about compliance requirements.

The financial industry has expressed skepticism regarding the feasibility and legality of unilaterally capping credit card rates. Experts question whether the President has the authority to impose such a limit without congressional approval, and acknowledge the political hurdles to passing legislation to that effect. The potential impact on bank profits and the broader economy is also a major concern.

Bank of America’s Position and Existing Rates

Bank of America already offers credit cards with introductory APRs below the proposed 10% threshold. Its BankAmericard, for example, currently features a 0% introductory APR for 18 months. However, following the introductory period, the APR increases to a range of 14.5% to 24%, dependent on the cardholder’s creditworthiness. The bank’s consideration of a new card with a 10% rate suggests a willingness to adapt to the potential new regulatory landscape, though the financial implications are still being assessed.

Brian Moynihan, CEO of Bank of America, has reportedly sent a “clear message to Washington” regarding the proposed rate cap, though the specifics of that message have not been publicly detailed. The bank is weighing its options as it navigates the uncertainty surrounding the potential policy change.

Broader Market Implications and Consumer Debt

The proposed cap comes at a time of rising consumer credit card debt. As of the third quarter of September 30, 2025, Americans held a total of $1.2 trillion in outstanding credit card balances, representing a nearly 6% increase year-over-year, according to the Federal Reserve Bank of New York. The average consumer owes nearly $7,900 on their credit cards, encompassing both bank and store-branded cards, as reported by LendingTree.

Analysts at The Banker warn that capping credit card rates could inadvertently reduce consumer spending due to restricted access to credit. This could also drive consumers towards more costly alternative forms of borrowing. The potential for reduced credit availability and its impact on economic growth are key concerns for industry observers.

Citi’s Response and Profitability Concerns

Citigroup is also reportedly exploring the possibility of introducing a new credit card with a 10% interest rate, alongside Bank of America. This suggests a broader industry consideration of the proposal, despite reservations about its potential consequences.

The timing of the debate over credit card rates coincides with a period of strong profitability for major banks. Recent earnings reports from Bank of America, Citigroup, and Wells Fargo demonstrate robust financial performance, adding to the tension between the administration’s push for consumer relief and the industry’s financial success. The potential impact on bank profits is a central argument against the proposed cap.

Potential Economic Consequences

While the intention behind the proposed cap is to alleviate household debt, concerns remain that it could have unintended consequences for the economy. Reduced credit availability could stifle consumer spending, a key driver of economic growth. Banks may respond by tightening lending standards or reducing credit limits, making it more difficult for consumers to access credit altogether. The long-term effects of such a policy remain uncertain, and the banking industry is closely monitoring developments as the Trump administration seeks to address concerns about credit card interest rates.