By Micah Jonah
January 12, 2026
U.S. financial stocks and UK listed lenders fell on Monday after President Donald Trump called for a one year cap on credit card interest rates, raising fears of revenue losses across the banking and consumer finance industry.
Trump on Friday proposed a 10 percent cap on credit card interest rates, starting January 20, reviving a campaign pledge aimed at easing cost of living pressures. He did not provide details on how the policy would be enforced, triggering uncertainty among investors.
Shares of major U.S. banks declined in early trading, with JPMorgan Chase and Bank of America falling sharply, while Citigroup and Wells Fargo also posted losses. In the UK, Barclays shares slid to their lowest level in nearly a month. U.S. consumer finance firms, including Synchrony Financial, Bread Financial and Capital One, recorded steeper drops, while American Express, Visa and Mastercard also traded lower.
Analysts expressed doubts that the proposal would be implemented, noting that interest rate caps would require congressional approval and would likely face legal challenges if attempted through executive action.
Market analysts warned that if enforced, the cap could hurt bank margins, reduce access to credit, particularly for borrowers with lower credit scores. Some lenders could respond by cutting credit limits or closing accounts, potentially pushing consumers toward more expensive non bank lending options.
Credit cards remain one of the most expensive forms of consumer borrowing in the United States, largely due to their unsecured nature. According to the Federal Reserve, the average credit card interest rate stood at nearly 21 percent in November.
Investors are now watching closely as major U.S. banks begin reporting fourth quarter earnings this week, with executives expected to address the potential impact of regulatory and political pressure on lending and profitability.
