Core Viewpoint - President Trump has proposed a cap on credit card interest rates at 10% effective January 20, 2026, to address consumer affordability concerns, which would be the lowest rate seen since at least 1994 [1][3]. Industry Impact - Credit card companies may face negative stock reactions if the proposed cap reduces their net interest income, which was a record $130 billion in 2022 [2][4]. - The average credit card interest rate in the U.S. is currently 19.65%, with store credit cards averaging 30.14% [3]. - A cap on interest rates could lead to reduced access to credit, particularly for younger and less affluent individuals, as companies may limit credit supply to manage risk [6][7]. Company Performance - American Express reported $15.5 billion in net interest income for 2024, an 18% increase from 2023, driven by higher interest rates and revolving loan balances [10]. - Capital One's net interest income rose to $31.2 billion in 2024, a $2 billion increase from the previous year, attributed to higher average loan balances [11]. - Investors should monitor the potential impact on net interest income for major card issuers like American Express, JPMorgan Chase, and Capital One if the cap is implemented [9]. Regulatory and Market Reactions - Industry groups, including the Bank Policy Institute and the American Bankers Association, have opposed the cap, arguing it could push consumers toward less regulated and more costly alternatives [11]. - The proposed cap follows previous unsuccessful attempts by Senators Hawley and Sanders to implement similar measures [3].

Group 1 - President Trump proposed a one-year cap on credit card interest rates at 10%, claiming the American public is being "ripped off" [1] - The announcement has received criticism from various political figures, including Sen. Bernie Sanders, who labeled the cap as "unacceptable" [3] - The issue of high credit card interest rates has been a persistent concern, particularly as many Americans lack sufficient emergency savings, leading to financial strain [2] Group 2 - Sanders criticized Trump's proposal, stating it contradicts his earlier commitment to regulate Wall Street and impose a 10% cap on interest rates [3] - Significant profits of large banks have been highlighted, with JPMorgan CEO Jamie Dimon reportedly increasing his wealth by $770 million in 2025 [4] - Sen. Elizabeth Warren criticized Trump's promises regarding the credit card rate cap as empty and accused him of ignoring affordability [4] Group 3 - Hedge fund manager Bill Ackman warned that if credit card lenders cannot charge adequate rates, they may cancel millions of consumer cards, pushing consumers towards loan sharks with worse terms [5]

President Donald Trump on Friday called for a one-year cap on credit card interest rates at 10%, effective Jan. 20, without specifying details. “Please be informed that we will no longer let the American Public be “ripped off” by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more, which festered unimpeded during the Sleepy Joe Biden Administration. AFFORDABILITY!” he wrote on social media. Most Read from Bloomberg It’s not clear whether credit card companies will respond ...