Credit Card and Bank Stocks Slide After Trump Floats 10% Cap on Interest Rates

Wall Street is treating it like a policy shock, even if it’s not policy yet.

Credit card and bank stocks dropped Monday morning after President Trump said he wants to impose a hard 10% cap on credit card interest rates for one year, a move that would directly hit some of the most profitable parts of consumer finance.

In a Truth Social post Friday evening, Trump said he would call for a one-year 10% cap on credit card APRs. Over the weekend, he doubled down, warning that issuers charging above that level as of January 20 would be “in violation of the law.”

Important caveat: none of this currently carries the force of law.

Not easily.

George Pollack, senior U.S. policy analyst at Signum Global Advisors, noted that while Trump is publicly backing a cap, this likely can’t be done by executive order and would require an act of Congress.

Still, the market didn’t wait around for legal details.

Financials were broadly pressured in premarket trading:

Translation: traders are pricing in at least some probability this becomes real, or at minimum becomes a political headline risk that hangs over earnings calls.

Bloomberg Intelligence analysts Ben Elliott and Edward Najarian flagged that a hard cap would be especially painful for lenders that rely heavily on interest income from revolving credit:

They also said the hit would be smaller for American Express $AXP ( ▼ 4.27% ) , which has a different customer base and business mix.

If it did happen, the likely response wouldn’t be banks “taking less profit.”

It would be:

While traditional issuers got smoked, buy-now-pay-later names moved higher:

The logic is pretty simple: if banks stop extending credit to riskier consumers, BNPL could pick up the slack. Klarna even publicly applauded the proposal.

What makes this different from a normal Trump headline is that the political groundwork already exists:

So even if Trump can’t do it unilaterally, it’s not a fringe proposal anymore.

Bottom line: whether or not this becomes law, Monday’s move shows investors are suddenly being forced to price a new risk into U.S. consumer finance… regulation that directly attacks APR as a profit engine.