Former President Donald Trump has announced plans to cap credit-card interest rates at 10% in a sweeping move targeting consumer debt affordability. The proposal, unveiled just hours after its disclosure, could significantly impact bank profitability and credit availability across the U.S. financial sector.
- Proposed 10% cap on credit-card interest rates applies to federally regulated accounts.
- Average credit-card interest rates were 25% in 2025; outstanding consumer debt reached $1.2 trillion.
- Visa (VZ), JPMorgan Chase (JPM), and Citigroup (C) face potential 30% compression in net interest margins.
- Stocks of major banks declined 1.8% to 2.4% on announcement day.
- Potential for tighter credit underwriting and reduced card issuance.
- Market response included a rise in 10-year Treasury yield by 8 basis points.
Former President Donald Trump has unveiled a policy initiative to cap credit-card interest rates at 10% across all federally regulated credit products, citing growing financial strain on American households. The announcement, made during a public address in New York, comes amid rising concerns over consumer debt levels, which have reached $1.2 trillion in outstanding credit-card balances as of late 2025. The proposal, if enacted, would represent a major shift in consumer finance regulation and directly affect major issuers like Visa (VZ), JPMorgan Chase (JPM), and Citigroup (C), whose net interest margins are heavily reliant on high-yield credit products. The proposed cap would be implemented through executive action or new legislation, depending on congressional cooperation, and would apply to all credit-card accounts under federal jurisdiction. While average credit-card interest rates have hovered near 25% in 2025, the 10% ceiling would represent a dramatic reduction. Analysts warn this could compress net interest margins for large banks by up to 30%, particularly for institutions with significant credit-card portfolios. For instance, Visa’s 2024 annual report showed that transaction-based revenues from card lending contributed 18% to total revenue, with average APRs on its networked cards exceeding 22%. Market reaction was immediate. On the day of the announcement, shares in JPMorgan Chase (JPM) fell 2.1%, while Visa (VZ) dropped 1.8% and Citigroup (C) declined 2.4% in early trading. Bond markets also reacted, with the 10-year Treasury yield rising 8 basis points as investors priced in potential fiscal and monetary policy uncertainty. Financial analysts caution that such a cap could lead to tighter credit underwriting standards, reduced card issuance, and higher fees or annual charges to offset lost interest income—ultimately limiting access for lower-income borrowers. The policy’s broader implications extend beyond individual banks. Consumer spending, a key driver of U.S. GDP, could see a short-term boost from lower debt servicing costs, but long-term credit availability may decline. Regulatory agencies, including the Consumer Financial Protection Bureau, are expected to face intense scrutiny over implementation timelines and enforcement mechanisms. The move underscores a growing political focus on consumer debt, particularly as election-year rhetoric intensifies around affordability and financial fairness.