A proposal by US President Donald Trump to cap credit card interest rates has drawn sharp criticism from the head of JPMorgan Chase, who warned it could seriously damage the economy. Jamie Dimon, chief executive of the world’s largest bank, said the plan would sharply reduce access to credit for most Americans and have a knock-on effect on businesses such as restaurants, retailers, travel companies and even schools.
Earlier this month, Trump said he wanted to limit credit card interest rates to 10% for one year starting 20 January. However, he did not explain how the cap would be enforced or whether it would be legally possible. Speaking at the World Economic Forum in Davos, Dimon described the idea as “an economic disaster”, adding that while banks like JPMorgan would survive, consumers would not be so fortunate.
Dimon said a cap at that level would be a drastic move that could cut off credit for around 80% of Americans, many of whom rely on credit cards as a financial safety net. He argued that the biggest impact would not fall on banks, but on everyday services, as people struggle to pay for essentials such as food, travel, education and utility bills.
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