Financial Stocks Fall Following Trump’s Call for a Credit Card Interest Cap

U.S. and UK financial stocks retreated on Monday after President Donald Trump called for a 10 per cent cap on credit card interest rates, a proposal that could pressure a major source of bank revenue.

Shares of leading U.S. banks moved lower, with JPMorgan Chase down 2.5 per cent, Bank of America falling 1.6 per cent, Citigroup sliding 3.7 per cent, and Wells Fargo easing 1.5 per cent. In the UK, Barclays dropped 2.2 per cent, touching its lowest level in nearly a month.

Consumer finance firms recorded steeper losses. Synchrony Financial, Bread Financial, and Capital One declined between 8 per cent and 11 per cent, while American Express fell 3.8 per cent. Payment companies Visa and Mastercard also slipped by 1.8 per cent each.

Analysts cautioned that the proposal, which suggests implementing the cap from 20 January, faces significant legal and legislative hurdles. They noted that any interest rate limit would likely require Congressional approval and could be challenged if pursued through executive action.

Market participants also warned that a cap on credit card rates could prompt banks to tighten lending standards, reduce credit limits, or close accounts for higher-risk borrowers, potentially pushing consumers toward alternative and more expensive lending options. Data from the Federal Reserve shows that average U.S. credit card interest rates stood at 20.97 per cent in November.

Attention is now turning to upcoming earnings reports, as major U.S. banks begin releasing fourth-quarter results this week. JPMorgan is set to report first, followed by Bank of America, Citigroup, and Wells Fargo in the coming days.