The recent announcement by President Donald Trump regarding a proposed cap on credit card interest rates has sent shockwaves through the banking and financial sectors, leading to a noticeable drop in bank stocks. On Friday, Trump took to Truth Social to declare that he believes interest rates on credit cards should be limited to 10% for a one-year period starting January 20, 2026. However, he did not clarify how this cap would be implemented or whether it could be legally enforced.
This news has had immediate repercussions, particularly for Barclays, the UK bank with a significant presence in the U.S. credit card market, which saw its shares plunge by 3.5%. Similarly, American Express, Visa, and Mastercard also experienced declines during premarket trading hours.
Banking associations across the United States have voiced concerns, stating that imposing such a cap could restrict access to credit for many individuals and prove "devastating" for millions of families and small businesses that rely on credit for their financial needs.
In his social media statement, Trump emphasized his commitment to protecting American consumers from what he termed exploitation by credit card companies. He stated, "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%. Please be informed that we will no longer let the American Public be 'ripped off' by Credit Card Companies."
On Sunday, while speaking to reporters aboard Air Force One, Trump reiterated his stance, suggesting that credit card companies would face legal consequences if they failed to comply with his proposal. As a result, major U.S. banks saw their shares decline in premarket trading on Monday, with notable drops including JPMorgan Chase, which fell by 3.2%, and Bank of America, down 2.5%. Among credit card companies, American Express dropped by 4%, Visa fell by 1.2%, and Mastercard decreased by 2%.
However, it's important to note that U.S. lawmakers have indicated that implementing such a cap would require new legislation to be passed by Congress. Senator Elizabeth Warren, a Democrat, commented on X, stating, "Begging credit card companies to play nice is a joke. I said a year ago if Trump was serious I'd work to pass a bill to cap rates. Since then, he's done nothing but try to shut down the CFPB [Consumer Financial Protection Bureau]."
In a previous attempt to tackle high interest rates, Senators Bernie Sanders and Josh Hawley introduced bipartisan legislation aimed at capping credit card interest rates at 10% for five years, but this proposal has yet to progress into law.
In April 2025, the Trump administration also attempted to repeal a regulation that restricted credit card late fees to $8, a rule established by President Biden's administration as part of an initiative against so-called "junk fees."
Prominent billionaire fund manager Bill Ackman expressed support for Trump's goal of reducing credit card rates, describing it as "a worthy and important one." However, he cautioned that capping rates at 10% could lead to millions of Americans having their credit cards canceled, as credit card companies would struggle to price the risks associated with subprime borrowers adequately.
A collaborative statement from five U.S. banking organizations acknowledged that they share the president's objective of making credit more affordable for Americans. Nevertheless, they warned that the suggested cap could reduce the availability of credit and severely impact many American families and small businesses that depend on credit cards—essentially harming the very consumers the proposal aims to assist. They concluded by noting that if such a cap were to be enacted, it might push consumers towards less regulated and more expensive credit options.
