US President Donald Trump’s proposal to cap credit card costs would be “an economic disaster”, the boss of one of the world’s biggest banks has warned.

JPMorgan Chase chief executive Jamie Dimon said the plan would remove credit from the majority of Americans and hit restaurants, retailers, travel firms and schools.

Trump this month wrote on Truth Social that interest rates on credit cards should be limited to 10% for one year from 20 January.

The cap has yet to come into force and the president did not say how it might be introduced or whether such a move would be legally enforceable.

Asked about the cap at the World Economic Forum (WEF) in Davos, Dimon said: “It would be an economic disaster, and I’m not making that up because our business… we would survive it by the way.”

He said capping interest rates on credit cards at Trump’s suggested level of 10% would be “drastic” and cut access to credit for 80% of Americans, adding that it is “their back up credit”.

In a dig at senators Bernie Sanders and Elizabeth Warren, who have supported such a cap, he said if Trump did go ahead with the plan, it should be trialled in their respective states of Vermont and Massachusetts.

Dimon added: “The people crying the most won’t be the credit card companies, it will be the restaurants, the retailers, the travel companies, the schools, the municipalities because people will miss their water payments.”

Top JP Morgan executives including Dimon had previously warned that a 10% interest rate cap would severely hurt consumers, adding their voices to criticism of the proposal.

Trump doubled down on his suggestion on Wednesday, telling the business news channel CNBC: “I’ve had calls from credit card companies, people that are friends of mine, actually, and I treat them good.

“I respect them greatly, but they make a lot of money, they got to give people a break.”

US banking associations have said capping interest rates would make it harder for people to access credit and be “devastating” for millions of families and small businesses.

The average interest rate for credit cards in the US is roughly 20%.

In his statement on social media on 13 January, Trump called for a 10% limit, reviving an idea he put forward during his 2024 presidential election campaign.

“Effective January 20, 2026, I, as President of the United States, am calling for a one year cap on Credit Card Interest Rates of 10%,” he wrote. “Please be informed that we will no longer let the American Public be ‘ripped off’ by Credit Card Companies.”

The social media post spooked investors in credit card firms American Express, Visa and Mastercard, while UK bank Barclays also saw its shares dip.