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Alexandria Ocasio-Cortez Says She's Fighting President Trump's "Illusion of Power" : Up First from NPR : NPR

  

Category:  News & Politics

Via:  thomas  •  one month ago  •  19 comments

By:   Susan Davis, Kelsey Snell and Reena Advani (NPR)

Alexandria Ocasio-Cortez Says She's Fighting President Trump's "Illusion of Power" : Up First from NPR : NPR
Representative Alexandria Ocasio-Cortez, a New York Democrat, says she thinks Republicans have begun making mistakes... and her party is resolved to strike back.

This is a Transcript of the "Up First" Podcast that was made after the NPR interview with Alexandria Ocasio-Cortez. If you would rather listen to the podcast,  it can be found at at the seed. If you would like to watch the full interview, Here it is.


S E E D E D   C O N T E N T


STEVE INSKEEP, HOST:

Alexandria Ocasio-Cortez challenged the Justice Department to say if she's under investigation.

ALEXANDRIA OCASIO-CORTEZ: It's important to call this administration's bluff. They rely on the illusion of power.

INSKEEP: The Democrat wants to find her party's way back into power. It's a special episode of UP FIRST from NPR News.

INSKEEP: I'm Steve Inskeep. Ocasio-Cortez wants to win back working-class voters who supported President Trump in 2024, which leads to a question.

To what extent is immigration as an issue part of your problem with working-class voters?

OCASIO-CORTEZ: I guess my question would be, what does the word problem mean?

INSKEEP: Also, did Trump get ahead of Democrats on working-class economic issues, and have Democrats lost ground because they're bad at governing? Stay with us. We'll put those questions and more to Alexandria Ocasio-Cortez.

INSKEEP: Alexandria Ocasio-Cortez is one of the Democratic Party's biggest stars. When she was first elected in 2018, she was very much an outsider - a social media phenomenon, often a critic of her party's programs and leaders. Now she's seen as more of an insider - a somewhat more senior figure, still a big star. And so we brought her here to Studio 1 to ask what she thinks her party can do with its current dilemma. Democrats are out of power in Washington. They're watching President Trump enact his agenda. And they know the president has great appeal with a large part of their traditional base - the working class, people Ocasio-Cortez would feel that she would like to represent. Here's some of our conversation.

If you had to pick one word, what is a word that describes the state of your party right now?

OCASIO-CORTEZ: I think a word to describe the state of the party is resolved. If I had to pick one word, it would be resolved.

INSKEEP: It's not shocked or dismayed or anything like that at this moment?

OCASIO-CORTEZ: I mean, in this moment...

INSKEEP: On the defensive?

OCASIO-CORTEZ: ...I think we've moved through shock. I think we've moved through dismay. I think we've moved through the five stages of grief. I think we've moved through that defensiveness. But it is, I think, a rapidly evolving situation.

INSKEEP: Just before we talked, the situation evolved a bit more. House Republicans approved a budget plan with hardly a vote to spare. Ocasio-Cortez joined every Democrat in voting no.

OCASIO-CORTEZ: I do believe that the Republican Party is making certain large errors right now and that they are underestimating the public.

INSKEEP: She focused especially on one large number - $880 billion. That's the amount of savings that Republicans propose to find, much of it likely from Medicaid, which provides health care for millions. When asked this week, Republican House Speaker Mike Johnson defended those cuts.

(SOUNDBITE OF ARCHIVED RECORDING)

MIKE JOHNSON: Those are precious taxpayer dollars.

INSKEEP: And he told reporters at the Capitol that the change would not affect care.

(SOUNDBITE OF ARCHIVED RECORDING)

CAITLIN HUEY-BURNS: Can you say unequivocally that, further down the line, there won't be any cuts to Medicaid programs?

JOHNSON: Yeah. So, look - let me clarify what we're talking about with Medicaid. Medicaid is hugely problematic because it has a lot of fraud, waste and abuse. Everybody knows that. We all know it intuitively. No one in here would disagree.

INSKEEP: In our conversation, Alexandria Ocasio-Cortez essentially did disagree, casting doubt that cutting waste could save so much.

OCASIO-CORTEZ: If that cut becomes reality, it's important for people to understand - not just are people going to be thrown off of Medicaid. Not only are Medicare recipients who receive, for example, long-term care benefits from Medicaid going to be affected. But people who are not on Medicaid are likely going to see their health insurance premiums go up because the more people get kicked off of Medicaid, the more uninsured people there are in the United States, the more they use ERs, the more that they go directly to hospitals for care. And the cost of uninsured people is oftentimes then borne in health insurance premiums, as well - in deductibles.

INSKEEP: The erosion of Democratic Party support among working-class voters has been pretty well-documented. It seems to cross racial and other lines. It's real. And Democrats have talked a lot about what they maybe did wrong in the way that they spoke or the way they approached people or the way that they acted. But I want to flip that around a little bit. What do you think President Trump has done right that has appealed to traditional Democratic constituencies?

OCASIO-CORTEZ: Some of his campaign promises. He does a good job of pairing, what I would say, some of the largest giveaways to the 1% and elites with very tangible policy promises.

INSKEEP: No tax on tips.

OCASIO-CORTEZ: Exactly. You take no tax on tips, no tax on Social Security - these things sound great. They also directly appeal to very specific pockets of people who tend to be working class, and that creates a permission structure, right? You toss a crumb to us, and you give the farm to the big fish. And I think he's very sophisticated in how he tailors those things together.

INSKEEP: Some of those promises are things that Democrats themselves would like - capping interest rates on credit cards, to give one example. Has there been some discussion among Democrats that, I mean, you're almost a little envious? He's gotten ahead of you on some of these issues.

OCASIO-CORTEZ: Well, the credit card interest rate cap is my bill from 2019 with Senator Sanders. And we're having some bipartisan momentum on it. Senator Hawley is interested in working with Senator Sanders and myself. I've also - have been working with some Republican colleagues. But it is a signal that Republicans understand the trouble that they are in trying to pursue their own agenda in a very naked form. They need certain fig leaves, and they are sophisticated about that.

INSKEEP: I think of another aspect of this, though - Dean Phillips, one of your fellow Democratic members, was on television this past week. Fox News, as a matter of fact. And he appeared to wish Democrats acted a little more like Trump in this way. He wished that they would appeal to businesspeople to get smart people into government to talk about efficiency. He seemed to wish Democrats would do what Elon Musk is doing, even if he doesn't agree with the way that Elon Musk is doing it.

OCASIO-CORTEZ: I would say that instead of appealing to other politicians, we should be appealing to the American people. And if you ask the American people what they think of what Elon Musk and DOGE are doing with government right now, they are vehemently opposed. The reactions right now are not just in Democratic districts. They are in Republican districts. Even Republicans in my district, they're saying, I voted for Trump. I did not vote for Elon Musk. I did not vote for this. I did not vote for mass buyouts of the federal workforce. We did not vote for the corruption of gutting NASA and then having the contracts go to SpaceX. We did not vote for Starlink to start replacing critical FAA operations.

INSKEEP: Which is the thing that's in the news that's being discussed. OK.

OCASIO-CORTEZ: Yes. And I think that there is a very, very deep corruption at the core of this. If Elon Musk wanted to divest himself of his businesses and enter public service with his so-called business expertise, that is his prerogative. But so long as he maintains a vested financial interest in gutting the federal government, he is acting in his own self-interest and not those of the American people.

INSKEEP: Alexandria Ocasio-Cortez was talking in NPR Studio 1. We met with her at a moment when Democrats are out of power and trying to find their way back in. And we're reaching the point in our conversation where we asked about one of the most polarizing issues - immigration. Surveys suggest that President Biden's handling of that issue cost Democrats votes even in some immigrant communities. So can Democrats push back against a president they see as lawless while also defending people in the country who lack legal status? Her answer comes right after this.

It's a special edition of UP FIRST. I'm Steve Inskeep. The first time I talked with Alexandria Ocasio-Cortez was June 27, 2018. It was the morning after a primary election in New York when a leading House Democrat, Joe Crowley, lost his seat. On the radio the next morning, we heard Crowley singing in tribute to the woman who defeated him. Let's hear that moment from 2018.

(SOUNDBITE OF ARCHIVED RECORDING)

JOE CROWLEY: (Singing) In the days, we sweat it out on the streets of a runaway American dream.

(SOUNDBITE OF ARCHIVED NPR BROADCAST)

INSKEEP: "Born To Run," as Springsteen fans will know. Crowley was singing for Alexandria Ocasio-Cortez. She's 28 years old. She's a former organizer for presidential candidate Bernie Sanders, and she is on the line after an enormous upset. Good morning.

OCASIO-CORTEZ: Good morning. Thank you for having me.

INSKEEP: And congratulations to you. Did you appreciate the song?

OCASIO-CORTEZ: I do. I do. I thought it was an amazing and incredible gesture. I definitely appreciate it.

INSKEEP: But what do you think you offered the voters that Joe Crowley, with all of his experience, did not?

OCASIO-CORTEZ: Well, I think for a really long time, voters in this district were yearning for a candidate that spoke directly to them and to our needs. We're having an affordability crisis in New York City. We have a security crisis with our current immigration system, and they really, you know, I think I was able to allow our community to really feel seen and heard and visited and advocated for.

INSKEEP: That was Ocasio-Cortez in 2018. She was progressive, a Democratic socialist. And after her surprise win that got her into Congress, she sometimes backed efforts to unseat other leading Democrats. She was said to be a member of the Squad, progressive women who confronted President Trump during his first term. And in 2019, Trump lashed out at them, as described back then by our correspondent Franco Ordonez.

FRANCO ORDONEZ: Yeah. I mean, he said, you know, you should go back to where you originally came from before you go speak out about how the United States government should be run. He also claimed that the lawmakers came from countries whose, quote, "whose governments are complete and total catastrophe." But as you noted, they're all American citizens, etc., etc.

INSKEEP: In fact, all four lawmakers had been born in the United States. The harshness of Trump's language and actions about immigration seemed to contribute to his unpopularity back in 2019, but in more recent years, the issue has changed. President Biden defeated Trump in 2020, undid some of Trump's immigration policies and then seemed to lose the immigration debate. Many voters saw the administration as far too lax toward migrants who lacked legal status. Biden finally cracked down but was replaced by Trump, who promised mass deportations, and that led us to a question in our interview with Representative Alexandria Ocasio-Cortez.

To what extent is immigration as an issue part of your problem with working-class voters?

OCASIO-CORTEZ: I mean, I guess my question would be, what does the word problem mean (laughter)?

INSKEEP: People voting for the other side and not for you.

OCASIO-CORTEZ: Yeah.

INSKEEP: Feeling that Democrats are not serious about the issue in ways that concern them.

OCASIO-CORTEZ: I think that we have a problem on immigration because of the lack of progress that we've had on this issue. And as we know, Republicans weaponize that lack of progress. They are completely uninterested in addressing undocumented people and addressing a path to citizenship.

INSKEEP: Well, they do want to address undocumented people by removing them. I mean, that's what the president is attempting now.

OCASIO-CORTEZ: Even then, you see what Republicans did with the Laken Riley Act. They authorize the complete gutting of due process. So now you can take a DACA recipient, a DREAMer, just accuse them of a crime.

INSKEEP: And deport them.

OCASIO-CORTEZ: And deport them. However, they also understand that they don't even have the infrastructure to do that. It's not even about creating a deportation pipeline. They are creating a private prison camp pipeline. So they're still creating pipelines to just increase this problem here in the United States.

INSKEEP: Why do you think this issue did seem to be a political loser for Democrats among key groups and key constituencies, if what you say is true?

OCASIO-CORTEZ: I think that a lack of a path to citizenship in the United States, the lack of addressing comprehensive immigration reform creates a large population of undocumented people in the United States, and that is allowed to be weaponized in many ways. We have a large population of undocumented people in the United States. Overwhelmingly, it is not because they crossed the southern border of the United States. It's because they came here in a documented fashion and overstayed a visa.

INSKEEP: Sure.

OCASIO-CORTEZ: And became undocumented. And it is the lack of ability for us to expand paths to citizenship, modernize paths to citizenship over decades, that create this bubbling issue that Republicans are allowed to weaponize.

INSKEEP: And you have voters in places like Arizona, which is a swing state that Democrats lost, or Colorado, which is generally a blue state, saying there's a lot of chaos. There's a lot of lawlessness.

OCASIO-CORTEZ: Yes.

INSKEEP: I don't know what to do here. Who's looking out after me?

OCASIO-CORTEZ: And I think when that is paired with divestment from the social safety net, when that is paired with lack of progress on minimum wage, when that is paired with rising costs of living, it sets the stage for a strongman to point to any marginalized group and say it's their fault, instead of looking at the gross income inequality that we have and its actual causes in the United States.

INSKEEP: Since the election, many Democrats have said that they need a tougher approach to immigration. Ocasio-Cortez still argues that many people who are here without legal status should stay, and that led to a recent dispute with Tom Homan, the president's border czar.

You held an online forum, a know-your-rights forum that he didn't like. What were you doing? What was your goal as you saw it?

OCASIO-CORTEZ: I was informing all of my constituents of their constitutional protections, and, in particular, their constitutional protections against illegal search and seizure in the United States.

INSKEEP: Homan was upset, I suppose, because he felt that you were giving advice to people who were here illegally. Were you?

OCASIO-CORTEZ: I was giving advice to all of my constituents, yeah.

INSKEEP: He said he was going to report to you or even that he did reach out to the Department of Justice. Have you heard from the Department of Justice?

OCASIO-CORTEZ: I have not, and I intend on reaching out to the Department of Justice to inquire.

INSKEEP: Really? What would your question be for the Department of Justice?

OCASIO-CORTEZ: Well, there is a member of the Trump administration who is threatening and seeks to open an inquiry. And are you going to do it?

INSKEEP: Now, after our interview, Ocasio-Cortez sent a letter to the Justice Department, which she shared with NPR. It asks Attorney General Pam Bondi if she has, quote, "yielded to political pressure trying to weaponize the agency against elected officials whose speech they disagree with." We reached out to the Justice Department, and they told us they received the letter. They say they also just received, quote, "29 violent cartel leaders who were recently extradited back to the United States. We are more focused on the latter," the Justice Department says, without directly addressing whether AOC is under investigation or not. Here's more of our interview with the New York Democrat.

OCASIO-CORTEZ: I think it's important to know where this administration stands and if they intend on using political intimidation to silence their critics.

INSKEEP: The interim U.S. attorney here in Washington, D.C., where we are, Ed Martin, has several times said he has reached out to specific Democratic lawmakers such as Chuck Schumer, the Senate Democratic leader, to ask for clarification about various remarks that he regarded as threatening. I'm interested if you or your fellow Democrats are at all feeling intimidated or silenced.

OCASIO-CORTEZ: I'm not. I think it's important to call this administration's bluff. I think that this is what authoritarians do. I think this is what kleptocracies do. I believe that this is what corrupt administrations do. They rely on the illusion of power.

INSKEEP: Do you think other Democrats are watching their words?

OCASIO-CORTEZ: I think it's certainly possible, but I'm not sure. I cannot think of or point to any individuals who have said that. I do think that there are Democratic members of Congress who are preparing for that possibility.

INSKEEP: How do they prepare?

OCASIO-CORTEZ: I think they look to the possibility of litigation. I think they're saying, you know, do we have the best teams possible in order to carry out our work?

INSKEEP: Some Republican or many perhaps will be listening to this and thinking, wait a minute, actually, you're the ones who are prosecuting us. You are the guys who are weaponizing the Justice Department. How would you respond to somebody who may be thinking that?

OCASIO-CORTEZ: In what way (laughter)? In what way? Is it - is the very presence of...

INSKEEP: Putting Trump on trial would be their example, I suppose.

OCASIO-CORTEZ: Yes. I mean, here's the deal. In the United States, there is a jury where we are judged by our peers, and he was found guilty in court on 34 felony charges. If people want to say it was weaponized, I mean, it is hard-pressed to say that there's a partisan argument for that. You have Senator Menendez, famously.

INSKEEP: Democratic senator from New Jersey.

OCASIO-CORTEZ: Democratic senator from New Jersey.

INSKEEP: Convicted. Yeah.

OCASIO-CORTEZ: And to 11 years in prison. However, what is weaponization is that previously independent Department of Justice, and the U.S. attorney's office now turning around saying, we are not the American people's lawyers anymore. We are the president's lawyers. And that is a dramatic shift. That is a dramatic change in the structure of our justice system.

INSKEEP: It seems clear you would want to make a case then that this is a corrupt administration that's abusing power. Does the Democratic Party have some challenge in making that case, though, because of certain things that go on in the Democratic Party, or even in your state of New York or your city of New York, where your mayor is Eric Adams?

OCASIO-CORTEZ: Yeah.

INSKEEP: Who was indicted...

OCASIO-CORTEZ: (Laughter).

INSKEEP: ...Until recently, just for starters.

OCASIO-CORTEZ: Well, you know, I think it is important that we be not hypocritical in that. I've called for Eric Adams, Mayor Eric Adams, to resign or be removed if he refuses to do so. There was a pretty explicit quid pro quo arrangement that these attorneys saw in Mayor Adams approaching the Trump administration, saying, hey, you let me off the hook, and I will exchange public policy implementation, which is just as damning not only for Eric Adams, it's also equally damning in terms of corruption of the Trump administration.

INSKEEP: Is there another problem Democrats face because you would like government to work, and there's a broad perception, including among many liberals and progressives, that government doesn't work very well? It takes forever to build something in this country, to give a very obvious example. We do have a couple million federal workers, and a lot of people aren't sure how those people really touch their lives or do anything for them. Do you think government really isn't working well enough?

OCASIO-CORTEZ: I think it is about our society writ large is completely slanted so that the gains that we have go to the wealthy, go to the corporate class, go to the largest corporations in America who pay the least in taxes, and everyday working people seeing the least benefit in society. And I think the boiling rage that exists at this sense of injustice that you are working one, two jobs. You are scared to go to the doctor because you don't think that you'll be even able to afford a blood test, that you're working tirelessly and you're not even making eight, nine bucks an hour in a lot of places in this country.

And then, on top of it, everything feels increasingly like a scam, that not only are grocery prices going up, but it's like everything has a fee and a surcharge. And I think that anger is put out at government. It is put out at a lot of different areas. And in terms of efficiency, our government can be tremendously efficient for the wealthy but inefficient at times in delivering things for working people. That is not the same thing as justifying cutting the very few things that people actually interface with, going after the post office, going after the VA, going after Medicaid and Medicare. Those are two entirely different propositions.

INSKEEP: Would you like a president to go in and break some china and mess things up, even if you don't like the way this president is trying to do that?

OCASIO-CORTEZ: I think when we talk about breaking things, messing things up, I mean, to the FAA, no. To the NIH, no. To our ability to contain Ebola before it gets on a plane and comes into the United States, no. I don't want someone being reckless with the most critical infrastructure. I don't want someone being reckless abandoning experimental medical devices that are implanted in everyday Americans who have no other recourse because their disease has so far progressed. I actually don't want someone taking a wrecking ball to someone's chemotherapy to just see what happens.

Now, I do think that we can examine certain things like Medicare Advantage that I think is a scam that in the name of so-called efficiency, ironically enough, we have handed over huge amounts of health care disbursements to private insurers who are pocketing it and giving less coverage to the people who receive this than ever before. Sure, yeah, let's go after that. But I don't think we just destroy everything that we have worked so hard for as a country to become innovative, to become just to have some of the only lifelines that people have in this country to a roof over their head or food in their children's stomach. No, I don't think that we gamble with that.

INSKEEP: Representative Ocasio-Cortez, thanks so much for coming by.

OCASIO-CORTEZ: Of course, thank you so much. Appreciate it.

(SOUNDBITE OF MUSIC)

INSKEEP: Alexandria Ocasio-Cortez spoke with us in NPR Studio 1 here in Washington, D.C. You can watch the full interview on camera at the NPR app or on our website, npr.org, or on YouTube.

This special episode of UP FIRST was edited by Susan Davis, Kelsey Snell and Reena Advani. It was produced by Adam Bearne. Engineering support came from Neil Tevault and Hannah Gluvna, and our executive producer is Kelley Dickens.

I'm Steve Inskeep. Thanks for joining us.

(SOUNDBITE OF MUSIC)

Copyright © 2025 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR's programming is the audio record.


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Thomas
PhD Guide
1  seeder  Thomas    one month ago
You take no tax on tips, no tax on Social Security. These things sound great. They also directly appeal to very specific pockets of people who tend to be working class. And that creates a permission structure, right? You toss a crumb to us and you give the farm to the big fish.
 
 
 
JBB
Professor Principal
2  JBB    one month ago

original

 
 
 
Thomas
PhD Guide
2.1  seeder  Thomas  replied to  JBB @2    one month ago

I like the other one from GQ better...

 
 
 
JBB
Professor Principal
2.1.1  JBB  replied to  Thomas @2.1    one month ago

original

 
 
 
Thomas
PhD Guide
2.1.2  seeder  Thomas  replied to  JBB @2.1.1    one month ago

Yeah. The composition is much cleaner for a portrait.

Do you have any commentary on the article?

 
 
 
JBB
Professor Principal
2.1.3  JBB  replied to  Thomas @2.1.2    one month ago

AOC is Great. AOC is my Representative. AOC rocks...

original

 
 
 
Thomas
PhD Guide
2.2  seeder  Thomas  replied to  JBB @2    4 weeks ago

This one has the leading lines all wrong (they focus the attention on her feet) and she looks like she should be holding an urn.

800

At least in this crop she doesn't look so distant.  ;)

 
 
 
Thomas
PhD Guide
3  seeder  Thomas    one month ago

INSKEEP: Some of those promises are things that Democrats themselves would like - capping interest rates on credit cards, to give one example. Has there been some discussion among Democrats that, I mean, you're almost a little envious? He's gotten ahead of you on some of these issues.

OCASIO-CORTEZ: Well, the credit card interest rate cap is my bill from 2019 with Senator Sanders. And we're having some bipartisan momentum on it. Senator Hawley is interested in working with Senator Sanders and myself. I've also - have been working with some Republican colleagues. But it is a signal that Republicans understand the trouble that they are in trying to pursue their own agenda in a very naked form. They need certain fig leaves, and they are sophisticated about that.

 
 
 
Sean Treacy
Professor Principal
3.1  Sean Treacy  replied to  Thomas @3    one month ago
ell, the credit card interest rate cap is my bill from 2019 with Senator Sanders.

Possibly one of the stupidest , economically illiterate proposals in recent history.  No wonder it's a Sanders/AOC proposal.  

 
 
 
Thomas
PhD Guide
3.1.1  seeder  Thomas  replied to  Sean Treacy @3.1    one month ago
Possibly one of the stupidest proposals, economically illiterate proposals in recent history.  No wonder it's a Sanders/AOC proposal.  

Explain why is it stupid to cap interest rates on credit cards, please.  

 
 
 
Sean Treacy
Professor Principal
3.1.2  Sean Treacy  replied to  Thomas @3.1.1    one month ago
hy is it stupid to cap interest rates on credit cards, please. 

Because the only people who will be given access to those cards are rich people with high credit scores.  The only reason poor people  can get access to unsecured credit is the high interest rate. Interest rates are high because the default rate is high.  Take away the interest rate and banks will have to be very careful to only lend to people who won't default if they are going to make money.   People with average credit aren't going to qualify for credit cards. 

It will be a bonanza for loan sharks. 

 
 
 
Thomas
PhD Guide
3.1.3  seeder  Thomas  replied to  Sean Treacy @3.1.2    one month ago

Cry me a river.

My research assistant, ChatGPT set to Deep Research,  came up with this:

I'll find the net profit Capital One made from its credit card business in 2023, along with a broader analysis of net profit in the credit card industry. This will include data on major issuers and industry-wide trends.

I'll update you once I have the details.

Capital One’s Credit Card Net Profit in 2023

Net Income and Year-Over-Year Comparison

Capital One’s credit card segment earned about $3.5 billion in net income for 2023 , down significantly from $4.9 billion in 2022 and a peak of $7.8 billion in 2021 ( [PDF] Capital One 2023 Annual Report ). This drop reverses the spike in profitability seen in 2021 (when pandemic-era reserve releases boosted earnings) and continues the downward trend into 2023. In other words, Capital One’s card profits in 2023 were roughly 29% lower than 2022 and less than half the level two years prior ( [PDF] Capital One 2023 Annual Report ). Despite the decline, the credit card business remained a major profit center for Capital One in 2023.

Key Factors Influencing Capital One’s Card Profitability

Several factors drove the moderation in Capital One’s card profits:

  • Rising Loan Losses: Credit defaults normalized upward. Capital One’s net charge-off rate on credit card loans climbed to around 5.3% by late 2023 , up from about 5.0% a year earlier ( Capital One’s Card Volumes Grow 7%, Charge-Off Rate Is 6%       ) and well above the unusually low loss rates seen in 2021-2022. This increase in bad loans forced higher provisions for credit losses, directly cutting into net income. In fact, industry data show that credit card charge-off rates in 2023 were the highest since 2012 (though still near historical averages) ( Report to Congress: Profitability of Credit Card Operations of Depository Institutions; June 2024 ). Capital One’s focus on subprime and mid-market cardholders meant it felt this credit normalization acutely, as more borrowers fell behind on payments.

  • Higher Interest Income: On the positive side, interest rates rose sharply throughout 2022-2023, boosting credit card interest yields. U.S. credit card APRs hit record highs (averaging about 22.8% in 2023 , up from ~13% a decade earlier) ( Credit card interest rate margins at all-time high | Consumer Financial Protection Bureau ). Capital One benefited from this, earning more finance charge revenue as customers carried balances at higher rates. Indeed, net interest income increased thanks to both rate hikes and loan growth. This tailwind partially offset the higher charge-off expenses. However, rising rates were a double-edged sword – while they increased revenue, they also put more pressure on borrowers, contributing to the uptick in delinquencies.

  • Strong Consumer Spending: Consumer spending remained robust in 2023, which helped Capital One’s card business. Card purchase volumes grew about 7% year-over-year ( Capital One’s Card Volumes Grow 7%, Charge-Off Rate Is 6%       ), reflecting heavy usage of credit cards for purchases. This drove higher interchange fee revenue and kept loan balances growing (as some of those purchases turned into revolving debt). Average card loans were up ~6% for Capital One ( Capital One’s Card Volumes Grow 7%, Charge-Off Rate Is 6%       ), providing a larger base on which to earn interest. Healthy consumer spending (aided by low unemployment in 2023) thus supported top-line growth for the card segment.

  • Expense and Other Factors: Operating expenses and marketing costs also influence profitability. Capital One continued to invest in rewards and customer acquisition, which affects net profit margins. Additionally, the end of the Walmart co-branded card partnership (in late 2022) had an effect – Capital One saw the loss of some revenues (and a one-time accounting charge related to that portfolio’s sale/loss-sharing) which also weighed on 2023 results ( Capital One’s Card Volumes Grow 7%, Charge-Off Rate Is 6%       ). Overall, though, the biggest story for 2023 was that credit costs rose faster than revenues , compressing Capital One’s card profit from the highs of the prior two years.

Credit Card Industry Net Profit in 2023

Total Industry-Wide Profitability and Trends

Industry-wide, credit card lending remained highly profitable in 2023 , though earnings retreated somewhat from 2022. U.S. card issuers collectively generated on the order of tens of billions of dollars in net income for the year. One way to gauge industry profit is by looking at specialist “credit card banks.” According to the Federal Reserve, the group of major card-focused banks had an average return on assets of 3.33% in 2023 , down from an exceptionally high 4.70% in 2022 ( Report to Congress: Profitability of Credit Card Operations of Depository Institutions; June 2024 ). This decline in industry ROA was “mainly reflected [by] a continued increase in provisioning for loan losses” as firms braced for more defaults ( Report to Congress: Profitability of Credit Card Operations of Depository Institutions; June 2024 ). In other words, issuers had to set aside much more for bad loans in 2023, which ate into their bottom line. Even so, a 3.3% ROA far outpaces the roughly 1.3% average ROA for all U.S. banks ( Report to Congress: Profitability of Credit Card Operations of Depository Institutions; June 2024 ), underscoring that credit cards remain a lucrative business for lenders.

In absolute terms, the total profits of the card industry can be inferred from the large players: for example, JPMorgan Chase , the nation’s biggest card issuer, notched a record $49.6 billion in overall net income in 2023 ( Merchants Say Record JPMorgan Chase Profits Show Need to Pass ... ) (boosted by higher interest rates and a strong consumer). Not all of that is from credit cards, but card lending was a key contributor to its Consumer Banking earnings. Likewise, American Express – which focuses on credit/charge cards – reported about $8.3 billion in net income for 2023 , up ~12% from 2022’s profit on the strength of record card spending by its upscale customers ( AMERICAN EXPRESS ANNOUNCES RECORD FULL-YEAR 2023 ... ). Other major issuers had more mixed results: Citigroup’s profits from all operations fell to roughly $9 billion in 2023 (down over 40% year-on-year) ( Citigroup Net Income 2010-2024 | C - Macrotrends ), reflecting higher credit costs and one-time charges, while Discover Financial Services (a primarily credit card lender) saw its net income drop 35% to $2.7 billion in 2023 ( Discover Financial Services Net Income 2010-2024 | DFS ) as charge-offs normalized upward. Capital One’s own results, as noted, followed this industry pattern of lower YOY card earnings.

Despite these declines from 2022 levels, the credit card industry’s profitability remained robust by historical standards . In fact, many issuers in 2023 were still earning at or above pre-pandemic profit levels ( 2023 Consumer Credit Card Market Report ). The year 2021 had been unusually profitable (due to reserve releases post-COVID), so 2022-2023 represented a return toward normal. Importantly, the overall market continued to expand : total credit card debt hit a record $1.3 trillion by the end of 2023 ( Report to Congress: Profitability of Credit Card Operations of Depository Institutions; June 2024 ), up about 8% from the prior year, and purchase transaction volumes rose nearly 7% to about $5.9 trillion ( Report to Congress: Profitability of Credit Card Operations of Depository Institutions; June 2024 ). This growth in balances and spending translated into higher revenue (interest and fees) for issuers, helping offset the rising loss provisions. In 2022, for example, card issuers collected over $130 billion in interest and fees ( 2023 Consumer Credit Card Market Report ), and that figure likely grew further in 2023 as revolving balances increased. In short, strong loan growth and sky-high interest yields kept industry revenues climbing , ensuring that most major players remained profitable even as expenses grew.

Major Issuers’ Profitability Highlights

  • JPMorgan Chase (Chase): Chase is the largest U.S. credit card issuer by balances and spend. In 2023 it benefited greatly from consumer credit demand – executives noted that “loan demand remains quite muted everywhere except card” ( Credit Cards Help Push JPMorgan Chase Earnings ). Chase’s card loan portfolio expanded steadily, and higher rates improved its net interest margins. The bank’s Consumer & Card division delivered substantial profits , contributing to JPMorgan’s record earnings. Chase’s success illustrates a key trend: big diversified banks leveraged their scale and low funding costs to capture more credit card business, translating into outsized profit growth. (Notably, Chase’s 2023 profit included a boost from an acquisition, but even aside from that, core card earnings were strong.)

  • American Express (Amex): Amex had a banner 2023, hitting record revenues and strong profits . Net income rose to $8.4 billion ( AMERICAN EXPRESS ANNOUNCES RECORD FULL-YEAR 2023 ... ), as card member spending surged (especially on travel and entertainment, categories where Amex cards dominate). Amex’s affluent customer base remained resilient; higher card fees and increased card spending helped offset a moderate rise in write-offs. Its credit metrics stayed relatively healthy, so Amex did not need to build reserves as much as mass-market issuers. Overall, Amex’s profitability trend was upward – bucking the industry – thanks to its unique fee-driven model and premium customer segment.

  • Citibank (Citi): Citi is a major card issuer both in the U.S. (branded cards and retail store cards) and globally. In 2023, Citi’s overall profits dropped (to around $7.9–9.2 billion depending on measures) ( Citigroup Net Income 2010-2024 | C - Macrotrends ), and its U.S. card unit faced headwinds. Citi’s credit card revenues did grow, aided by rate increases and new account acquisitions, but this was outweighed by higher loan loss provisions and some restructuring costs. Citi’s private-label card portfolio (co-branded store cards) was hit by consumers feeling more stress from inflation, leading to higher delinquencies. Thus, Citi’s card profitability trended down in 2023, in line with many peers, even as the business line remained profitable overall.

  • Discover: Discover Financial, heavily focused on credit cards, experienced a notable profit decline in 2023. Full-year net income fell to $2.7 billion (from over $4 billion in 2022) ( Discover Financial Services Net Income 2010-2024 | DFS ). The primary cause was a jump in charge-offs and a corresponding build in loss reserves – Discover’s net charge-off rate on credit cards roughly doubled from the prior year’s unusually low level. Additionally, Discover faced some regulatory and operational hiccups (an overcharging issue and a brief halt in share buybacks), which added costs. While loan growth and interest yield were strong (Discover’s loan receivables and interest income actually rose in 2023), those positives were overshadowed by credit losses. Discover’s results exemplify how less diversified card issuers saw profitability erode as the credit cycle turned.

  • Other Issuers: Synchrony Financial , another large card-focused lender (private label cards), also saw net earnings drop (to about $2.24 billion in 2023, from $3.0B in 2022) as it increased provisions. Bank of America and Wells Fargo , which have sizable credit card portfolios within their broader consumer lending businesses, both remained profitable and grew card loans, though neither broke out card-specific profit publicly. In general, all major players stayed in the black for their card operations in 2023 – the issue was the degree of profit. Those catering to subprime segments (like Capital One, Discover, Synchrony) had larger profit declines, whereas those with prime customer bases or diverse revenue streams (Chase, Amex) managed to hold steady or improve. The competitive landscape also remained intense, with issuers investing heavily in rewards and marketing to capture spend – this arms race can pressure margins industry-wide.

Factors Affecting Industry Profitability in 2023

Several overarching factors shaped credit card industry profits in 2023:

  • Interest Rates and Margins: 2023 was marked by the highest interest rates in decades. The U.S. Federal Reserve’s rate hikes translated into record-high APRs for cardholders (~20–23% average) ( Credit card interest rate margins at all-time high | Consumer Financial Protection Bureau ). These high rates greatly increased issuers’ interest income – indeed, net interest income is the primary driver of card issuer profitability , amounting to about 10% of card assets in revenue ( 2023 Consumer Credit Card Market Report ) ( 2023 Consumer Credit Card Market Report ). Higher rates meant banks earned more on every dollar of revolving debt. However, funding costs for banks also rose, and issuers didn’t raise deposit rates as fast as card rates, resulting in wider net interest margins. This dynamic boosted profitability in 2023. That said, soaring APRs can eventually dampen borrowing or increase defaults. Thus far, consumers continued to borrow at higher rates, which benefited issuer profits.

  • Consumer Debt and Credit Quality: Consumer credit card balances reached all-time highs in 2023 (over $1.3 trillion outstanding ( Report to Congress: Profitability of Credit Card Operations of Depository Institutions; June 2024 )). This growth, fueled by pent-up demand and inflation, expanded the revenue base for issuers. At the same time, household financial health showed signs of strain : after a period of unusually low defaults (thanks to stimulus and forbearances in 2020–21), delinquencies rose throughout 2023. As noted, industry charge-off rates climbed to their highest in over a decade ( Report to Congress: Profitability of Credit Card Operations of Depository Institutions; June 2024 ), though still roughly in line with pre-2019 norms. Issuers had anticipated this normalization and started provisioning for losses in 2022, but the continued increase in 2023 required further reserve builds ( Report to Congress: Profitability of Credit Card Operations of Depository Institutions; June 2024 ). This trend impacted all lenders, particularly those with riskier portfolios. On the whole, consumer spending remained resilient (e.g. total card transactions up ~6-7% in 2023 ( Report to Congress: Profitability of Credit Card Operations of Depository Institutions; June 2024 )), which helped keep profits flowing. But rising consumer debt loads and interest burdens are a caution flag – analysts expect credit card losses to remain elevated into 2024 as higher rates and a slowing economy put pressure on borrowers ( Capital One's Credit Cards Drive Loan Growth, but Credit Results ... ). The delicate balance between robust spend and deteriorating credit quality was a key theme for profitability.

  • Regulatory and Competitive Environment: The industry in 2023 also faced emerging regulatory headwinds . Notably, the Consumer Financial Protection Bureau (CFPB) has proposed new rules to cap credit card late fees (potentially slashing the typical $30 fee down to ~$8). Such a change would significantly reduce fee income across issuers. A senior JPMorgan executive even warned that cutting late fees could “threaten the existence of free consumer checking accounts” as banks seek to recoup lost revenue ( Credit Cards Help Push JPMorgan Chase Earnings ). While the late-fee rule was still under consideration in 2023, issuers were bracing for its impact. Additionally, policymakers discussed other measures (like credit card routing regulations and interest rate caps) that, if enacted, could compress profit margins. On the competitive front, reward programs and customer acquisition costs remained high. Banks aggressively courted new cardholders with rich sign-up bonuses and cash-back offers, which increases marketing expense and rewards costs. Fintech alternatives (e.g. Buy Now, Pay Later services) also grew, creating pressure to innovate but potentially siphoning some transactions away from credit cards. Despite these challenges, the big incumbent issuers maintained pricing power in 2023 – for example, many raised card APRs above the prime rate increase (widening their margin) ( Credit card interest rate margins at all-time high | Consumer Financial Protection Bureau ), which bolstered profitability even as they faced greater competition and scrutiny.

In summary, 2023 was a year of robust yet moderating profitability for the credit card industry . Firms like Capital One exemplified how higher interest income and strong consumer spending kept revenues growing, but rising defaults and provisions pulled net profits down from prior-year highs. Industry-wide, the credit card business remained a profit engine for banks – returns on card assets are still much higher than most other banking activities ( Credit card interest rate margins at all-time high | Consumer Financial Protection Bureau ) – but the easy gains of the stimulus era have faded. Going forward, issuers are watching credit trends and regulatory developments closely. For 2023, though, credit card issuers enjoyed solid net profits supported by record card balances and interest rates, even as the cycle of increasing credit losses began to temper the boom.

Sources: Official 2023 financial filings and earnings releases (Capital One 10-K segment results ( [PDF] Capital One 2023 Annual Report ); American Express and Discover annual results ( AMERICAN EXPRESS ANNOUNCES RECORD FULL-YEAR 2023 ... ) ( Discover Financial Services Net Income 2010-2024 | DFS )), Federal Reserve and CFPB reports on credit card market conditions ( Report to Congress: Profitability of Credit Card Operations of Depository Institutions; June 2024 ) ( Credit card interest rate margins at all-time high | Consumer Financial Protection Bureau ) ( Report to Congress: Profitability of Credit Card Operations of Depository Institutions; June 2024 ), and industry analyses ( Capital One’s Card Volumes Grow 7%, Charge-Off Rate Is 6%       ) ( Credit Cards Help Push JPMorgan Chase Earnings ).
 
 
 
Sean Treacy
Professor Principal
3.1.4  Sean Treacy  replied to  Thomas @3.1.3    one month ago

Cry me a riv

I guess you can laugh about depriving credit to the middle class consumer all you want.  I don't find it particularly funny. I'm sure Joe Sixpack will love having to use his house as collateral to get a credit card. 

Yes, businesses make profits.  That's how they remain in business. Price controls will cause them to reconfigure their policies in order to remain profitable. Nothing ChatGPT told you will change that reality.  

 
 
 
Thomas
PhD Guide
3.1.5  seeder  Thomas  replied to  Sean Treacy @3.1.4    one month ago
I guess you can laugh about depriving credit to the middle class consumer all you want.

I am not laughing at anything. There is plenty of room for the middle class to get credit. I think that they are what the companies mainly feed off of. The CC Co's specialize in getting people hooked on credit. "Here! Have a new card! No interest until July. You can transfer all of your balances over and have one easy payment." Getting the credit is not the problem, it is once you have the credit using it responsibly. If you consistently pay more than your minimum balance, you will keep getting offers and raises in your credit amount. The credit card companies do not want the card paid off, they want the card at a steady income level. 

 I don't find it particularly funny.

Once again, I am not laughing at anything.

I'm sure Joe Sixpack will love having to use his house as collateral to get a credit card. 

Strawman. And wouldn't a home equity loan be more appropriate in that case?

I am not against businesses making profits, I am against usurus rates. 

 
 
 
Sean Treacy
Professor Principal
3.1.6  Sean Treacy  replied to  Thomas @3.1.5    one month ago
Getting the credit is not the problem,

It will be when its not offered. That's the point.  

Interest rates are high for credit cards because they are quick, unsecured loans available to people with less than stellar credit. 

Take away the high interest rates that make those loans feasible, than the options will either be no credit or credit that is secured by property.   

And wouldn't a home equity loan be more appropriate in that case?

Do you want to take out a home equity loan every time you need  you need a small advance? Credit cards are a convenient way to access cash in an emergency. Home  equity loans aren't. 

I am against usurus rates.

Then understand what will happen. Credit simply won't be available to a lot of people to whom it currently is. 

This is a perfect example of progressives not understanding the second order effects of their regulation. They think they can just impose price controls and it won't have any distorting effect on the market.  Prices controls always cause distortions. ALWAYS. 

 
 
 
Thomas
PhD Guide
3.1.7  seeder  Thomas  replied to  Sean Treacy @3.1.6    4 weeks ago

Take your progressives don't understand economics and put it somewhere else. 

The average purchase on a credit card is $99. That means that most of the credit card transactions are not for a high dollar amount. So they are not used for something that would cause a person to take out a loan, especially a loan against their home. They are used for everyday purchases. 

Credit card companies love it when you hit the sweat spot: Carrying to large a balance to pay off, but able to make a significant payment on the balance. That is why they keep polluting your mailboxes with all of those offers, because you haven't yet reached the spot where you are paying $100 or so above the minimum on a $15,000 revolve. They know that they have you. And they will work to keep you right there. Ooops. Hey, we can increase your credit, just sign here. 
It is a fucking scam, just like everything else. It may be dolled up to look pretty, but when the lipstick wears off, it is still a pig you were kissing.

 
 
 
Thomas
PhD Guide
3.1.8  seeder  Thomas  replied to  Sean Treacy @3.1.6    4 weeks ago

From the bit I Posted above

Despite these challenges, the big incumbent issuers maintained pricing power in 2023 – for example, many raised card APRs above the prime rate increase (widening their margin) (   Credit card interest rate margins at all-time high | Consumer Financial Protection Bureau  ), which bolstered profitability even as they faced greater competition and scrutiny.

Following the link:

Credit card average APR margin is the highest on record.

Over the last 10 years, average APR on credit cards assessed interest have almost doubled from 12.9 percent in late 2013 to 22.8 percent in 2023 — the highest level recorded since the Federal Reserve began collecting   this data   in 1994. The APR on most credit card accounts can be viewed as being composed of the prime rate and the APR margin. The prime rate (a benchmark most banks use to set rates) represents a good proxy for banks’ funding costs, which have increased in recent years. But credit card issuers have also sharply increased average APRs beyond changes in the prime rate.

Nearly half of the increase in average APR over the last 10 years has been driven by issuers raising their APR margin. APR margin for revolving accounts is now at 14.3 percent, the highest point in recent history. More than half of issuers sent offers by direct mail with a higher APR margin in the third quarter of 2023 than on the same product the year before, according to our analysis of Competiscan data.

Figure 1: Average APRs on Accounts Assessed Interest and Average Prime Rate at Year End

cfpb_figure-1-credit-card-profitability_2024-02.original.png

Source: Federal Reserve

Higher APR margin has fueled the profitability of revolving balances.

Typically, card issuers set an APR margin to generate a profit that is at least commensurate with the risk of lending money to consumers. In the eight years after the Great Recession, the average APR margin stayed around 10 percent, as issuers adapted to reforms in the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) that restricted harmful back-end and hidden pricing practices. But issuers began to gradually increase APR margin in 2016. The trend accelerated in 2018, and it continued through the pandemic.

Over the past decade,   card issuers increased APR margin   despite lower charge-off rates and a relatively stable share of cardholders with subprime credit scores. The average APR margin increased 4.3 percentage points from 2013 to 2023 (while the prime rate was nearly 5 percentage points higher). As such, the   profitability of revolving balanc excluding loan loss provisions (the money that banks set aside for expected charge-offs) has been increasing over this time period.

Figure 2: Average APR Margin and Charge-Off Rate (Federal Reserve)

cfpb_figure-2-credit-card-profitability_2024-02.original.png

Source: Federal Reserve

 
 
 
Ronin2
Professor Quiet
3.2  Ronin2  replied to  Thomas @3    one month ago

You mean like Democrats offered fig leaves to Republicans for the four years of the Brandon Administration?

Republicans should treat Democrats exactly the same way they were treated for the previous four years.

Either Democrats get on board; or they get steam rolled. Their policies are not mainstream; which is the reason they lost the last federal elections. Seems they haven't learned a damn thing outside of running to their media sycophants and blathering the same BS they have been for the previous nine years and counting.

 
 
 
JBB
Professor Principal
3.2.1  JBB  replied to  Ronin2 @3.2    one month ago

Bitter Much? Hard to imagine how you would have taken a loss...

 
 

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