Delta CEO claims that limiting credit card usage would negatively impact both banks and consumers

Delta CEO Voices Concerns Over Proposed Credit Card Interest Rate Cap

Ed Bastian, the CEO of Delta Air Lines, has joined other prominent business leaders in opposing former President Donald Trump’s proposal to limit credit card interest rates to 10%. Bastian argues that such a cap would ultimately disadvantage consumers.

“While the intention to provide relief to lower-income individuals and reduce interest rates may sound positive, the broader consequences are substantial,” Bastian explained in an interview with Bloomberg. “In reality, this move would restrict access to credit for many people and force banks to cut back on available credit lines.”

Recently, Trump stated that credit card companies would be “breaking the law” if they did not enforce a 10% interest rate ceiling for one year, despite lacking the legislative or executive power to mandate such a change.

The banking sector has strongly criticized the idea. JPMorgan’s Chief Financial Officer, Jeremy Barnum, commented on Tuesday, “If this were implemented, it would be detrimental to both consumers and the broader economy.” He added that the bank would need to make major adjustments to its credit card business if the cap were enforced.

Despite the Federal Reserve lowering interest rates late last year, rates on retail credit cards have remained stubbornly high. According to Bankrate, the average interest rate for store-branded credit cards still exceeds 30%, leaving many consumers facing very steep borrowing costs if they carry a balance.

Credit Cards and Airline Revenue

Airline loyalty programs, which often include co-branded credit cards issued in partnership with banks, are a significant source of income for carriers. Delta collaborates with American Express for its credit card offerings. “Our business isn’t primarily targeting lower-income segments,” Bastian noted.

Shifting Demand in Air Travel

Bastian’s remarks followed Delta’s latest earnings report, which highlighted that demand for premium travel continues to surpass that for standard economy seats. This trend has become more pronounced as affluent travelers maintain their flying habits, while those more sensitive to price have reduced their travel.

As a result, Delta is adjusting its strategy by focusing nearly all of its seat expansion on premium cabins, aiming to distinguish itself from low-cost competitors and cater to the higher end of the market.