Bank of America Considering 10% Credit Card Rate as Stock Improves Slightly
Bank of America might release credit card with a 10% interest rate in line with Donald Trump's proposal for financial institutions.
Quick overview
- President Trump proposed a 10% cap on credit card interest rates, which Bank of America is considering for new credit card offerings.
- Bank of America's stock has seen a slight increase but remains below its 90-day average and January peak.
- JPMorgan Chase's CEO criticized Trump's plan, warning it could negatively impact various businesses.
- There is uncertainty about the legality and implementation of Trump's proposal, prompting banks to prepare for potential changes.
Last week, President Donald Trump proposed a credit card rate cap of 10%, and Bank of America is now taking his proposal seriously as they consider new credit cards with 10% interest rates.
Will Bank of America (BAC) issue new credit cards that fall in line with Trump’s proposed 10% interest rate cap? It appears so, as the financial institution is considering issuing new cards that have that very rate, according to Reuters.
Bank of America’s stock is up slightly for Monday, with a 0.49% increase. At $51.98 per share, the stock is below its 90-day average and below the early January peak of $57 per share. The stock is generally reliable and profitable, but it is going through a downturn now as the financial sector feels the pressure of Trump’s anticipated policies.
Will the Proposed Rate Hurt Credit Card Companies?
JPMorgan Chase chief executive Jamie Dimon called Trump’s plan for credit card caps “an economic disaster.” He says the plan would hurt retailers, restaurants, and a variety of other businesses and institutions. On January 20th, Trump posted to Truth Social that the credit card rates for the United States should be capped at 10% for a full year.
Banks are concerned, of course, and some of them are already starting to take action. This is why Bank of America has already started figuring out how this might work for them. By getting out in front of a possible Presidential order, they can be better prepared than their competitors and brace for the impact of market change.
There is no word yet if Trump has decided to move forward with the plan, and the order might not even be legal. This could be a case of Trump throwing out a wish and seeing what comes of it, but U.S. banks know from history that they need to consider even Trump’s social media posts as potential administrative practice.
BAC stock share prices have dropped by 2% since the company reported its earnings earlier this month. TD Cowen investment services says their stock is a “Buy” and set their price target to $64.
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