BofA considers new credit cards with 10pc interest rate

BENGALURU: Bank of America is considering options to offer new credit cards with an interest rate of 10 percent to satisfy President Donald Trump’s demands, a source familiar with the matter said on Thursday.

Citigroup is also weighing new cards with a 10 percent rate as a potential solution to a broad cap, according to Bloomberg News, which first reported the news.

Citigroup declined to comment.

BofA’s shares were nearly 1.1 percent higher in afternoon trading, while Citi was up nearly 2 percent.

Trump, who first called for a 10 percent interest rate cap earlier this month, said on Wednesday he would ask Congress to approve the move for one year.

The proposal has drawn backlash from banking industry bodies, with executives also warning the wide-ranging cap would prompt a pullback on lending and curb economic growth. However, some experts argue that credit cards are highly profitable and have room for lower rates.

Analysts have said such a move would require legislation, with passage in Congress unlikely. Some also noted that the industry could push for a compromise where lenders launch no-frills cards at the 10 percent rates with fewer benefits.