Trump plan to cap bank card prices hits financial institution shares | EUROtoday

Shares in banks and bank card companies have fallen after US President Donald Trump referred to as for bank card prices to be capped.

On Friday, Trump wrote on Truth Social that rates of interest on playing cards needs to be restricted to 10% for one yr from 20 January. He didn’t specify how such a cap may be launched or whether or not such a transfer could be legally enforceable.

UK financial institution Barclays, which has a sizeable US card enterprise, noticed its shares fall 3.5%, whereas US companies akin to American Express, Visa and Mastercard had been additionally decrease in early buying and selling.

US banking associations say capping charges will make it more durable for individuals to entry credit score and be “devastating” for tens of millions of households and small companies.

The common rate of interest for bank cards within the US is roughly 20%.

In his assertion on social media, Trump referred to as for limiting it to 10%, reviving an concept he had put ahead throughout his 2024 presidential marketing campaign.

“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%,” he wrote. “Please be informed that we will no longer let the American Public be ‘ripped off’ by Credit Card Companies.”

On Sunday, chatting with reporters on Air Force One, Trump mentioned bank card firms could be “in violation of the law” if they didn’t comply together with his calls for.

American Express’s share value fell by 4% whereas Visa and Mastercard’s inventory dropped greater than 2%. Other US lenders together with JPMorgan Chase and Bank of America additionally noticed their shares open greater than 1% decrease.

Forcing firms to decrease their lending charges price would “upend the basic economics of the industry,” mentioned Matt Britzman, senior fairness analyst at Hargreaves Lansdown.

“Most banks would respond by cutting credit limits, closing riskier accounts, and scaling back rewards programmes, because they simply couldn’t cover losses at that price point.”

Nearly half of US households in 2022 carried bank card debt, based on the latest survey of client funds by the Federal Reserve.

It discovered that these with a stability owed greater than $6,000 (£4,454) on common – which, with rates of interest round 20%, translated into roughly $100 in month-to-month costs.

The concept of capping bank card charges has received help from an unlikely coalition of lawmakers, uniting these on the far-left, akin to Bernie Sanders, with populists that again Trump’s MAGA agenda.

But the trail to bringing the proposal into power is unclear.

Similar plans have languished in Congress. The administration has additionally pushed to scale back the position of businesses which have regulated such points prior to now.

“Begging credit card companies to play nice is a joke,” Democrat Senator Elizabeth Warren mentioned on X.

“I said a year ago if Trump was serious I’d work to pass a bill to cap rates. Since then, he’s done nothing but try to shut down the CFPB [Consumer Financial Protection Bureau]”.

Analysts mentioned govt motion by the White House would seemingly meet with authorized problem from the business, which has had success prior to now preventing regulation within the courts.

A joint assertion from 5 US banking our bodies mentioned they shared the president’s purpose “of helping Americans access more affordable credit”.

However, they added that the proposed cap would “reduce credit availability and be devastating for millions of American families and small businesses who rely on and value their credit cards, the very consumers this proposal intends to help”.

“If enacted, this cap would only drive consumers toward less regulated, more costly alternatives.”

Early final yr, Sanders and fellow US senator Josh Hawley had launched bipartisan laws which aimed to cap rates of interest on bank cards at 10% for 5 years, however it has but to make it into legislation.

In April 2025, the Trump administration moved to throw out a regulation capping bank card late charges at $8. The rule had been introduced in by President Joe Biden’s administration as a part of a crackdown on “junk fees”.