Karishma Vanjani
President Donald Trump on Friday called for credit-card companies to cap the interest rates they charge customers, as the president leans harder into addressing consumers' affordability concerns.
"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 said in a Truth Social post.
It was unclear how the move would be enacted, but credit-card companies may already be bracing for a negative stock reaction if a reduction in rates hits their net interest income.
Trump's proposed rate, if enacted, would be lower than any rate seen at least since 1994. The average credit-card interest rate in the U.S. is 19.65%, with store credit cards charging an average rate of 30.14%, according to Bankrate. Senators Josh Hawley, R-Mo., and Bernie Sanders, I-Vt., proposed the same cap on credit-card interest rates in a February 2025 bill that failed to gain traction.
Card lenders made a record $130 billion in credit-card interest and fees in 2022, with the average cardholder carrying a balance of over $5,000, according to a 2024 estimate from the Consumer Financial Protection Bureau.
Consumers may be welcoming Trump's announcement. The current delinquency for subprime credit-card borrowers -- 16.3% -- remains elevated, even as the market has seen an overall improvement in debt repayment behavior, data from the Federal Reserve shows. Total credit card balances in the U.S. totaled $1.23 trillion in the third quarter, up $24 billion from the previous quarter, according to the New York Fed.
That said, a cap would likely be a temporary Band-Aid for affordability concerns. When companies can't price their risk for leverage properly, they usually chop out smaller and risky borrowers, either by lowering their credit supply or cutting off access completely, research has widely shown. Credit-card companies often undercut the effectiveness of caps by using other fees and commissions, according to a World Bank working paper that looked at outcomes in countries such as Cambodia and the U.K.
"It is clear that it [the cap] would result in a dramatic reduction in access to credit, especially to younger and less affluent individuals," wrote Brian Jacobsen, chief economic strategist at Annex Wealth Management, in an email to Barron's.
In 2021, Illinois implemented a 36% cap on many consumer loans; the number of loans to subprime borrowers decreased by 38% in the state six months following the imposition, according to a 2023 study co-wrote by two professors at universities in Mississippi and a then-member of the Federal Reserve System's Board of Governors.
Capping interest rates would be bad for card issuers American Express and JPMorgan Chase, along with Capital One Financial, which acquired Discover Financial Services in summer 2025. If the cap is implemented, investors should keep a sharp eye on net interest income.
For American Express, higher interest rates and higher revolving loan balances, and a shift toward a younger cardholder base that values loyalty rewards helped the company bring in $15.5 billion in net interest income in 2024, up 18% from 2023. American Express, whose stock returned 25.7% in 2025, will share an update on last year's performance on Jan. 30.
Capital One pulled in $31.2 billion in net interest income in 2024, a $2 billion rise from the year prior that was mainly because of higher average loan balances and margins in its credit-card loan portfolio. Its stock returned 37% last year. Capital One will report its 2025 results on Jan. 22.
Industry trade groups have opposed the cap. ""If enacted, this cap would only drive consumers toward less regulated, more costly alternatives," the Bank Policy Institute, the American Bankers Association, and others said in a joint statement.
A JPMorgan Chase spokesperson refrained from commenting on the cap, with the company following a quiet period before it reports earnings on Jan. 13, and directed Barron's to industry groups on the topic. Other financial institutions didn't respond to a request for comment sent during off-business hours.
Trump's announcement comes after he called affordability a "hoax" at a Dec. 9 rally in Pennsylvania, where he claimed that "prices are coming down very substantially." The consumer price index reading for November, released Dec. 18, shows that prices rose 2.7% year-over-year, less than forecast.
Affordability is a vulnerability for the Republican party; most recent polls also show the GOP has lost favorability among voters. Trump also said this week he would likely be impeached if Republicans lose the midterm elections in 2026.
Investors have to decide whether Trump is serious. "I expect they soon will conclude he is, if only because he must be. Given what happened in New York, he can't allow Democrats to own the affordability narrative," wrote Peter Atwater, president of Financial Insyghts in a note, referencing democratic socialist Zohran Mamdani winning the New York City mayoral election.
Trump's announcement comes after he targeted home prices this week. "I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it," he said in a Truth Social post. On Thursday, Trump said he is also planning to push down mortgage rates by "instructing my Representatives to BUY $200 BILLION DOLLARS IN MORTGAGE BONDS."
Write to Karishma Vanjani at karishma.vanjani@dowjones.com.
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 10, 2026 15:28 ET (20:28 GMT)
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