Key Highlights
- US President Donald Trump called for capping credit card interest rates to 10%.
- This move led to a drop in shares of US banks and credit card firms.
- Major US lenders, including American Express, Visa, Mastercard, and Barclays, saw their share prices fall.
- US banking associations criticized the plan, saying it would reduce credit availability for millions of families and small businesses.
The Trump Credit Card Interest Rate Cap Plan: A Blow to Financial Markets
US President Donald Trump has issued a call to cap credit card interest rates at 10%, a move that has sent shockwaves through the financial markets, particularly affecting banks and credit card firms.
Immediate Impact on Share Prices
Following Trump’s announcement, shares in American Express, Visa, and Mastercard fell sharply during early trading. The impact was also felt across international markets; UK-based Barclays, which has a significant US card business, saw its share price drop by 1.9% at the close of London trading.
Broader Reactions from Banks
The proposal to limit credit card interest rates to 10% for one year from January 20, 2026, was met with resistance from US banking associations. These bodies argue that such a cap would make it harder for individuals and small businesses to access credit and could be “devastating” for millions of families.
According to the latest data from the Federal Reserve, nearly half of US households carried credit card debt in 2022, with those owing over $6,000 facing average monthly charges around $100 at a typical interest rate of 20%. Under Trump’s proposed cap, these costs would be significantly reduced.
Industry Response and Legal Challenges
Analysts predict that forcing credit card companies to lower rates could have significant implications for the industry. For example, Matt Britzman from Hargreaves Lansdown stated that banks might “cut credit limits, close riskier accounts, and scale back rewards programmes” in response.
The Trump administration’s move comes as it also seeks to reduce regulatory oversight over financial issues previously handled by agencies such as the Consumer Financial Protection Bureau (CFPB). This has raised concerns among opponents who argue that executive action could face legal challenges from credit card companies, which have had success in fighting regulations in court.
Support and Opposition
The proposal to cap interest rates has garnered support from an unlikely coalition of lawmakers, including Bernie Sanders on the far-left and Trump’s MAGA supporters. However, the path to implementation remains uncertain, with similar plans having failed to pass through Congress in the past.
In April 2025, the Trump administration also moved to repeal a regulation capping credit card late fees at $8, further signaling its intent to reduce regulatory constraints on financial institutions.
Expert Analysis and Future Implications
The move by President Trump is seen as part of his broader strategy to address consumer finance issues, but it could also have far-reaching effects. Analysts warn that while capping rates might lower immediate costs for consumers, it could also restrict credit availability, potentially harming small businesses and individuals who rely on credit cards.
As the financial markets continue to react to these announcements, stakeholders are closely watching how the proposal will unfold and its ultimate impact on the industry and consumers.
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