BofA and Citigroup Consider 10% Credit Card Rates to Disrupt Banking

The era of sky-high credit card debt might be cooling down. According to Bloomberg News, banking giants Bank of America (BofA) and Citigroup are weighing the introduction of new credit cards with an interest rate of just 10%. It's a bold move considering the current industry average hovers between 20% and 25%, leaving many consumers struggling with mounting interest.

The Strategy Behind BofA and Citigroup 10% Credit Card Rates

This potential shift isn't just about being generous; it's a calculated play for market share. Reuters reports that these banks are targeting high-credit-score individuals who are currently paying higher rates elsewhere. By offering a 10% APR, BofA and Citigroup could lure prime borrowers away from competitors, effectively consolidating high-quality debt onto their balance sheets. For consumers, this could mean a massive opportunity to refinance existing high-interest balances.

Market Impact and Economic Outlook

Economists suggest this could trigger a "rate war" among major lenders. If the two giants move forward, others like JPMorgan Chase and Wells Fargo won't stay quiet for long. They'll likely need to match these offers to prevent a mass exodus of their most profitable customers. However, the success of this strategy depends heavily on the Federal Reserve's interest rate path throughout 2026.