Trump credit card rate cap plan: Capital One stock, Visa stock, JPM stock slide as Trump’s credit card rate cap plan sparks market panic
Trump wrote on Truth Social: “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%,” as reported by Barron’s. After this post, credit card companies’ shares dropped fast in early trading. Synchrony Financial fell more than 9%, making it the biggest loser in the S&P 500 before the market opened.
Credit card stocks fall hard
Capital One stock dropped between 6.8% and 9% in premarket trading. American Express shares fell around 3.6% to 4.4%. Big banks with large credit card businesses also declined. Citigroup shares fell about 3.7% to 4%, according to the report by Barron’s. JPMorgan Chase slipped around 2.5% to 3%. Bank of America dropped about 1.7%.
Wells Fargo shares were down around 2%, as noted by Investing.com. Payment companies were also hit, with Visa and Mastercard each slipping nearly 2%. Barclays shares fell about 2.5%. Bread Financial Holdings stock plunged about 12%. Analysts said the market reaction shows fear that a rate cap could hurt profits across the credit card industry.
Raymond James analyst Ed Mills said Trump does not have the authority to impose such a cap by himself. Mills said a credit card rate cap would need approval from Congress. He added: “The legislative risk remains relatively low, but clearly higher now that the president has called for this action,” as stated in the report by msn. Jefferies analyst John Hecht said the proposal would likely be “dead on arrival” in Congress. Hecht said this kind of plan has not had strong support in the past.
Why analysts are worried
Still, stocks fell heavily even though the plan may not pass. Hecht warned that in the “unlikely event” the cap moves forward, it would disrupt the credit card business overnight. Truist analyst Brian Foran said the plan could make the credit card business unprofitable. Foran said: “The renewed focus on a 10% interest rate cap for credit cards is not great, to put it mildly,” as cited by msn. He added that such a cap would hit subprime credit cards the hardest.
Foran said Synchrony Financial and Bread Financial would be worst affected because they rely mostly on credit cards. He said Capital One would be next in line for damage. For big banks, Foran said Citigroup has the highest exposure to credit cards, followed by JPMorgan Chase. Analysts said the early stock drop reflects fears about how serious Trump’s plan could become. Investing.com reported that Trump said Americans are being “ripped off” by credit card rates in the 20% to 30% range. Raymond James analysts again stressed that the chance of Congress passing the cap is low. However, they warned that the risk is higher now because Trump has openly pushed the idea. They said a rate cap could cause banks to tighten credit rules. This could mean fewer people with lower credit scores get approved for credit cards. Analysts warned this could reduce card spending and slow account growth.
Who loses, who gains, and what comes next
Raymond James said: “While we believe the rate cap has a low probability of passing Congress, we see the biggest possible risk for issuing processors and, to a lesser extent, the networks,” as stated by Investing.com. They added that banks would likely push back hard, saying a cap could “cut off credit to the same borrowers that the President is trying to help”. Analysts said a key thing to watch is how leaders of the House Financial Services Committee and Senate Banking Committee respond.
Mizuho analyst Dan Dolev said the plan could actually help buy-now-pay-later and personal loan companies. Dolev said companies like Affirm, Upstart, SoFi, Block, and PayPal could benefit if banks reduce lending to risky borrowers. He noted average U.S. credit card interest rates are around 20%. He also said more than half of U.S. consumers have a FICO score below 745, which usually means higher borrowing costs.
In that case, many borrowers may move to alternative lenders instead of credit cards. Overall, markets are now watching closely to see if Trump’s credit card plan gains political support or fades away.
FAQs
Q1. Why did Capital One stock, Visa stock, and JPM stock fall today?
They fell after President Trump called for a 10% cap on credit card interest rates, which could hurt bank and card company profits.
Q2. Can Trump really cap credit card interest rates at 10%?
No, analysts say such a cap would need approval from Congress to become law.
Post Comment