A proposed restriction on credit card interest rate increases by former President Donald Trump has triggered unease among financial firms, threatening to erode projected earnings from the credit card sector. Market volatility has risen as investors reassess the profitability of major issuers.
- Trump’s proposed 18% cap on credit card APRs could reduce sector revenue by up to $2.9 billion.
- Credit card operations generated $11.8 billion in net income across JPMorgan, Bank of America, and Visa in Q4 2025.
- JPMorgan Chase, Bank of America, and Visa saw stock declines of 2.1%, 1.8%, and 1.3%, respectively, on January 14.
- S&P 500 Financial Sector Index dropped 1.4% amid regulatory uncertainty.
- The Fed has not issued a statement but is reportedly assessing the proposal’s economic impact.
- Regulatory risk is now factored into earnings forecasts during Q4 reporting season.
Wall Street’s late-year profit rally is facing a new headwind as speculation intensifies over a potential regulatory move targeting credit card interest rates. The proposal, attributed to former President Trump in a public statement on January 13, 2026, would cap annual percentage rates (APRs) on credit card balances at 18%, down from current averages exceeding 22%. This would directly impact the core revenue stream of major card issuers. The credit card segment accounts for approximately 35% of total revenue for top financial institutions, including JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), and Visa Inc. (V). The projected net income from credit card operations in Q4 2025 stood at $11.8 billion across these three firms combined. A regulatory cap at 18% could reduce that figure by up to $2.9 billion, depending on the phase-in period and enforcement scope. Equity markets reacted swiftly. The S&P 500 Financial Sector Index declined 1.4% on January 14, 2026, while shares of JPMorgan fell 2.1% and Bank of America dropped 1.8%. Visa, which earns nearly 40% of its revenue from payment processing tied to credit card usage, saw its stock fall 1.3% amid concerns over transaction volume pressure. Treasury yields ticked up, reflecting heightened risk premiums on financial assets. The uncertainty comes at a critical juncture. With fourth-quarter earnings season nearing its close, investors are now factoring in regulatory risk as a potential earnings tailwind. The Federal Reserve has yet to comment on the proposal, but internal documents indicate that the Board of Governors is reviewing its implications on consumer credit access and financial stability.