Shares of major credit‑card issuers fell sharply on Monday after the President announced a plan to cap credit‑card interest rates at 10%.
What the proposed cap means
The plan would limit the interest rate that credit‑card companies can charge to 10% starting 20 January 2026. Most cards currently charge around 20%, so the cut could cut earnings, especially from borrowers with lower credit scores.
Big moves in the market
- Capital One (COF): down about 8.2% to $228.70.
- Visa (V): down more than 3% to $337.32.
- American Express (AXP): fell over 5% to $355.51.
- Citigroup (C): down 3.8% to $116.67.
- Mastercard (MA): slipped 3.4% to $555.89.
- JPMorgan Chase (JPM): fell 2.4% to $321.23.
- Bank of America (BAC): down 2% to $54.76.
- Wells Fargo (WFC): down 2.1% to $93.89.
- Affirm (AFRM): dropped 8% to $75.25.
- US Bancorp (USB): down 2.9% to $53.56.
Why investors care
The lower rate limit could reduce profit margins for card issuers, which rely on higher interest rates from riskier borrowers. A drop in earnings often leads to lower stock prices, as we saw across the sector.
What you might consider
- Review exposure to credit‑card issuers in your portfolio.
- Watch upcoming earnings reports for signs of profit pressure.
- Consider diversifying into sectors less affected by interest‑rate caps.
Remember, this is just an overview, not a prediction. Do your own research and talk to a qualified adviser before making any decisions.