TLDR
- President Donald Trump announced that credit card interest rates must not exceed 10 percent starting January 20, 2026.
- Trump warned that credit card companies would be in violation of the law if they charged over the proposed limit.
- His statement caused a sharp decline in shares of major banks and credit card companies during premarket trading.
- Lawmakers responded by stating that such a cap would require approval from Congress through formal legislation.
- US banking associations said the proposed rate cap could limit credit access and hurt families and small businesses.
President Donald Trump stated that credit card companies would break the law if they charged more than 10% interest after January 20, 2026. His comments triggered market reaction, pushing down shares in major US banks and credit card firms. Trump did not explain how the cap would be enforced or passed into law.
President Donald Trump Calls for 10% Interest Cap
President Trump posted on Truth Social that credit card rates must not exceed 10% from January 20 next year. He said, “We will no longer let the American Public be ‘ripped off’ by Credit Card Companies,” calling for urgent action. On Sunday, he told reporters that violators would be in “violation of the law” if they charged more.
Trump’s announcement lacked legal detail, but the tone suggested a directive rather than a proposal. However, lawmakers reminded that a law must be passed in Congress to impose such a cap. Democrat Senator Elizabeth Warren responded, “Begging credit card companies to play nice is a joke.”
She added that Trump had done nothing to support earlier efforts to cap rates. In 2023, Warren and other senators proposed legislation to set a 10% rate ceiling for five years. That proposal has not yet become law or advanced in Congress.
Markets React as Financial Firms Slide
Trump’s statement affected market confidence and drove share prices of financial institutions lower. On Monday, shares of American Express fell 4%, while Mastercard and Visa declined by 2% and 1.2% respectively. JPMorgan Chase dropped 3.2%, and Bank of America slid 2.5% in premarket trading.
UK bank Barclays, which holds a large US credit card portfolio, saw its stock decline by 3.5%. Traders responded swiftly to Trump’s statement, which came without policy details. Some analysts said uncertainty about enforcement contributed to the selloff.
Although the policy is not yet law, investor sentiment was impacted. Trump’s message raised concerns about future regulation and the profitability of card operations. Financial stocks saw immediate pressure, reflecting these uncertainties.
Trump Credit Card Plan Faces Doubts
US banking associations warned the proposed rate cap could reduce credit access for millions of Americans. In a joint statement, five banking groups said the plan would “be devastating for families and small businesses.” They also warned it could drive users toward unregulated and higher-cost lending options.
Bill Ackman, a billionaire hedge fund manager, agreed lowering rates was a worthy goal. However, he warned a strict 10% cap might cause credit card companies to cancel cards for high-risk customers. He said companies would not be able to price subprime risk effectively under such a ceiling.
In 2025, Trump’s administration scrapped a Biden-era rule capping late fees at $8. That decision drew criticism from consumer groups and lawmakers. The current announcement appears to contradict that earlier regulatory stance.
Lawmakers stressed that only Congress can create such a cap through legislation. Past proposals have failed to pass despite bipartisan support. Senator Bernie Sanders backed a similar bill last year, but it remains stalled in Congress.
Trump’s post and comments have reignited debate around credit card regulation. The legality of his directive remains unclear without a supporting bill. For now, the policy exists only as a stated intention without legal backing.
