Wall Street skeptical Trump's proposed credit card rate cap will advance

• Analysts at TD Cowen, Barclays, and Jefferies all assign low probability to the cap passing, noting it requires congressional approval and cannot be implemented via executive order
• The current average U.S. credit card interest rate is 19.65%, and millions of Americans carry monthly balances, with lower-income households disproportionately affected by high rates
• The proposal represents heightened headline risk for card issuers as affordability becomes a central political issue ahead of mid-term elections

Summary: Wall Street Skeptical of Trump's Credit Card Rate Cap Proposal

President Donald Trump announced Friday a proposal to cap credit card interest rates at 10%, effective January 20, without providing implementation details. Wall Street analysts widely dismiss the plan's likelihood of advancing, citing significant legislative and legal hurdles.

Key Details:

• Current average U.S. credit card interest rate: 19.65% (per Bankrate)
• Proposed cap: 10%
• Target date: January 20

Analyst Consensus:

Multiple major brokerages—TD Cowen, Barclays, and Jefferies—assign low probability to the proposal's passage. Analysts emphasize that rate caps require congressional legislation, not executive action. Similar measures have historically failed in both the Senate and House of Representatives.

Market Context:

Credit cards represent a cornerstone of U.S. consumer finance, with high interest rates and fees generating substantial profits for banks and card issuers. Millions of Americans carry monthly balances, with lower-income households disproportionately affected by high rates. Balances can escalate quickly when not paid in full.

Political Background:

The proposal emerges as affordability becomes a central issue ahead of U.S. mid-term elections, with voters increasingly concerned about everyday costs. However, Washington remains divided on whether rate caps help consumers or restrict credit access.

Market Implications:

While the announcement creates headline risk for credit card issuers (Visa, Mastercard, and major banks), analysts view actual implementation as unlikely. The proposal would require congressional support, which has been absent for similar past initiatives. Financial sector stocks may experience short-term volatility but face limited long-term legislative threat based on historical precedent.