Trump’s Credit Card Threats Rain On Big Banks’ Earnings Parade

President Trump has called for a one‑year 10% cap on credit card interest rates, and that threat is pressuring big bank stocks and clouding what were otherwise solid quarterly earnings reports. If implemented as described, the move could strip billions of dollars in profit from large issuers’ highly lucrative card businesses.​

What Trump is proposing

• Trump urged card companies to limit interest rates on revolving credit card balances to 10% for one year, about half the current average rate on outstanding balances in the U.S.​

• He set a January 20 deadline for companies to comply, framing the idea as consumer relief amid high borrowing costs.​

Impact on big banks’ earnings

• Credit cards are one of the most profitable lines for major banks, so a cut of this scale would significantly compress margins on existing balances and new lending.​

• Analysts estimate that a 10% cap could wipe out billions of dollars in annual revenue across the largest issuers, undermining otherwise strong earnings trends in areas like trading and investment banking.​

Market reaction so far

• Financial shares fell after the announcement, with investors reassessing earnings forecasts for banks that rely heavily on U.S. card interest income.​​

• On earnings calls, bank executives faced repeated questions about how they would respond, but most stressed that any concrete impact depends on whether the proposal turns into binding regulation or law.​

Political and regulatory backdrop

• The move comes after years of fights over “junk fees,” including the now‑vacated Biden‑era rule that sought to cap most credit card late fees at 8 dollars before being struck down and abandoned following industry litigation.​

• Trump’s approach shifts the focus from late fees to interest rates themselves, raising questions about how much authority the administration has to enforce a rate cap without new legislation from Congress.​

What it could mean for consumers

• If enacted as proposed, many cardholders carrying balances would see their interest costs fall sharply for a year, though banks could respond by tightening credit standards, lowering limits, or raising other charges.​

• There is also a risk that aggressive caps drive more lending into non‑bank or “buy now, pay later” channels that are regulated differently, changing where consumers get unsecured credit rather than simply making it cheaper across the board.​​