SKN | Bank of America Weighs Credit Card With 10% APR as Rate-Cap Debate Intensifies

Key Points

• Bank of America is considering a credit card with a permanent 10% APR cap.

• The discussion follows renewed political pressure to limit credit card interest rates.

• Rising U.S. consumer credit card debt has amplified policy and industry scrutiny.

• Banks warn that strict caps could restrict credit access and reshape lending models.

Bank of America is evaluating whether to introduce a new credit card with an interest rate capped at 10%, placing the lender at the center of an intensifying debate over the cost of consumer credit in the United States.

The internal discussions follow renewed calls from Donald Trump urging banks to temporarily limit credit card interest rates, arguing that elevated borrowing costs have placed undue strain on American households.

Potential New Product Under Consideration

Bank of America already offers products with short-term low or zero introductory rates, such as the BankAmericard, which features a 0% APR for a limited promotional period before reverting to variable market rates. A card with a sustained 10% APR ceiling would represent a more structural change, extending affordability beyond promotional windows.

Such a move would mark a notable departure from traditional credit card pricing models, which typically price risk dynamically based on borrower profiles and broader interest-rate conditions.

Policy Pressure Meets Regulatory Uncertainty

While the idea of a 10% cap has gained political traction, the regulatory pathway remains unclear. Banking executives have cautioned that without explicit legislation or regulatory guidance, it is difficult to assess how a mandatory cap would be implemented or enforced.

Speaking recently at the World Economic Forum in Davos, President Trump signaled an intention to work with lawmakers on broader consumer credit relief, though no formal framework or timeline has been outlined.

Rising Credit Card Debt Raises Stakes

The debate is unfolding as U.S. credit card balances continue to climb. Outstanding credit card debt reached record levels in 2025, intensifying political focus on interest costs and household financial stress.

Higher balances combined with elevated rates have made credit cards a focal point in discussions around consumer affordability and financial stability.

Industry Pushback and Economic Concerns

Banks and industry analysts have warned that hard caps on interest rates could reduce credit availability, particularly for lower-income or higher-risk borrowers. Critics argue that artificially low pricing could push some consumers toward less regulated lending channels while also dampening bank willingness to extend unsecured credit.

From a macro perspective, reduced credit access could weigh on consumer spending, an important driver of U.S. economic growth.

Banks Explore Alternative Responses

Despite opposition to mandatory caps, lenders are increasingly exploring voluntary or targeted solutions. Some fintech firms have launched niche products offering fixed low APRs, suggesting that selective demand exists for affordability-focused cards.

For Bank of America, the decision is likely to hinge on regulatory clarity, risk management trade-offs, and whether a capped-rate product can be scaled without undermining profitability.

Forward-Looking Outlook

Bank of America’s deliberations underscore the growing tension between political pressure to lower borrowing costs and the banking sector’s need to price credit risk sustainably. Whether or not a 10% APR card ultimately materializes, the discussion signals a broader reassessment of consumer credit pricing in an era of rising debt and heightened policy scrutiny.

As regulators, lawmakers, and financial institutions continue to engage, credit card interest rates are likely to remain a prominent issue shaping both public debate and product innovation.

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