Bank stocks hit by Trump’s plan to cap credit card costs & more related News Here

Shares of banks and credit card companies have fallen after US President Donald Trump called for limiting credit card costs.

On Friday, Trump wrote on Truth Social that interest rates on cards should be limited to 10% for one year starting January 20. He did not specify how such a limit might be implemented or whether such a move would be legally enforceable.

UK bank Barclays, which has a large US cards business, saw shares fall 3.5%, while US companies such as American Express, Visa and MasterCard were also down in early trading.

US banking associations say capping the rates would make it harder for people to get loans and would be “devastating” for millions of families and small businesses.

The average interest rate on credit cards in the US is around 20%.

In his statement on social media, Trump called for limiting it to 10%, reviving an idea put forward during his 2024 presidential campaign.

“Effective January 20, 2026, I, as President of the United States, am calling for a 10% one-year cap on credit card interest rates,” he wrote. “Please be informed that we will no longer allow the American public to be ‘duped’ by credit card companies.”

On Sunday, speaking to reporters on Air Force One, Trump said he would “violate the law” if credit card companies did not comply with his demands.

American Express’s share price fell 4% while Visa and MasterCard’s stock fell more than 2%. Shares of other US lenders, including JPMorgan Chase and Bank of America, also opened more than 1% lower.

Forcing companies to lower their lending rates “would upend the fundamental economics of the industry,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

“Most banks will respond by cutting credit limits, closing risky accounts and reducing rewards programs, because they can’t cover losses at that price point.”

Nearly half of American households will have credit card debt in 2022, according to the most recent survey of consumer finances by the Federal Reserve.

It found that people who owed an average of more than $6,000 (£4,454) – which, with interest rates around 20%, translates into about $100 in monthly fees.

The idea of ​​limiting credit card rates has received support from an unlikely coalition of lawmakers, uniting far-left figures like Bernie Sanders with populists who support Trump’s MAGA agenda.

But the way to implement the proposal is not clear.

Similar plans have been shelved in Congress too. The administration has also pushed in the past to reduce the role of agencies that regulate such issues.

“Begging the credit card companies to be nicer is a joke,” Democratic Senator Elizabeth Warren said on Twitter.

“I said a year ago that if Trump was serious I would work to pass a bill to limit rates. Since then, he has done nothing but try to shut down the CFPB [Consumer Financial Protection Bureau],

Analysts said the White House executive action would likely face a legal challenge from the industry, which has had success fighting regulation in the courts in the past.

A joint statement from the five US banking bodies said they shared the president’s goal of “helping Americans access more affordable credit.”

However, he said the proposed limit “would reduce credit availability and be devastating to millions of American families and small businesses who rely on and value their credit cards, the very consumers this proposal seeks to help”.

“If enacted, this limit will only drive consumers toward less regulated, more expensive options.”

Early last year, Sanders and fellow U.S. Senator Josh Hawley introduced bipartisan legislation aimed at capping interest rates on credit cards at 10% for five years, but it has yet to be signed into law.

In April 2025, the Trump administration implemented a regulation limiting credit card late fees to $8. The rule was brought in by President Joe Biden’s administration as part of a crackdown on “junk fees.”