Shares in big banks and credit card companies fell after President Donald Trump announced a plan to limit credit card interest rates to 10 percent for one year, starting January 20, 2026. He shared the plan on Truth Social but did not explain how it would work or whether it would be legally enforceable.
Barclays, which has a big US credit card business, saw its shares drop 3.5 percent. American companies like American Express, Visa, and Mastercard also lost between 2 and 4 percent in early trading. Other big US banks, including JPMorgan Chase and Bank of America, opened lower by more than 1 percent.
Experts warn that cutting interest rates could hurt the credit card industry. Banks might lower credit limits, close higher-risk accounts, or reduce rewards programs to avoid losing money at the lower rate.
Currently, the average US credit card interest rate is around 20 percent. Almost half of US households carry credit card debt. Those with balances over $6,000 pay roughly $100 a month in interest at today’s rates.
Support for a rate cap comes from an unusual mix of politicians, from Bernie Sanders to Trump’s allies. But similar efforts in Congress have failed before, and any executive action would likely face legal challenges.
US banking groups said they want credit to be affordable but warned that a cap could reduce lending and push people toward riskier and more expensive options.
Earlier, the Trump administration tried to reverse a rule from President Biden that capped late fees at $8. Sanders and Senator Josh Hawley also introduced a bill to limit interest rates to 10 percent for five years, but it never became law.
