In a surprising move that has sent ripples through the financial sector, President Trump announced a proposal to cap credit card interest rates at 10% for one year, starting January 20, 2026. This announcement came via his social media platform on January 9, 2026, but lacks critical details on how such a policy would be implemented.
The current landscape for credit card Annual Percentage Rates (APRs) varies significantly, with borrowers boasting excellent credit facing rates between 17% and 18%, while subprime borrowers deal with burdensome rates soaring into the mid-30s. Trump’s proposed cap would thus mark a dramatic shift in the credit market, potentially reshaping lending practices and consumer access.
Despite the swirling uncertainty surrounding this proposal, Visa Inc. (V) has managed to maintain a robust performance. The company saw its stock rise approximately 14% over the past year, buoyed by Q3 results that bested analyst expectations and an increased dividend now set at $0.67 per share. Visa’s earnings per share came in at $2.98 compared to an expected $2.97, with revenue growing roughly 11.5% year over year.
Unlike traditional credit card issuers, Visa derives its income primarily from transaction and network fees instead of interest on balances. Therefore, the immediate impact of a 10% cap on credit card interest rates would likely be felt by issuing banks first. These institutions are the ones that generate interest revenue, which could be severely constrained by such a cap.
However, the implications for Visa’s revenue could become significant over time. As issuing banks adapt to potential lower interest margins, they might tighten lending standards, reduce credit availability, or even alter rewards programs to compensate for lost income. Some banks could introduce new fees or increase merchant processing fees to maintain profitability, which, in turn, could decrease the volume of transactions processed by Visa.
The proposal has received vocal opposition from industry trade groups. The American Bankers Association warns that implementing a statutory cap could inadvertently restrict credit access for high-risk borrowers. Concerns have been raised that consumers who are refused traditional credit might turn to alternative, potentially predatory lenders.
Market Reaction and Implementation Hurdles
Financial markets appear to be treating Trump’s proposal as speculative at best, with muted reactions indicating low expectations for quick enactment. The lack of specific details regarding necessary legislative or regulatory actions adds to the uncertainty. Should Congress become involved, significant challenges from industry stakeholders could delay or derail implementation.
Investor sentiment remains focused on Visa’s core strengths rather than policy risks. Analysts note that growth in cross-border payments, expanding digital payment solutions, and enhanced value-added services underpin Visa’s ongoing performance. Consequently, several institutional investors have opted to bolster their positions in Visa as early as January 2026, anticipating stable improvements rather than dramatic changes.
As the debate unfolds, political figures have weighed in on the implications of Trump’s proposal. Senator Bernie Sanders criticized Trump hours after the announcement, referencing previous promises that never materialized. In contrast, Senator Josh Hawley praised the move as a “fantastic idea,” expressing eagerness to support it.
A report released in 2025 by the Bank Policy Institute outlines the potential adverse effects of a 10% cap, asserting that it would harm consumer access and lead to reduced cardholder benefits.
Ultimately, Visa’s stock performance reflects the market’s skepticism regarding the immediate feasibility of Trump’s proposal. As it stands, the trajectory of credit card interest rates may remain unchanged until substantial legislative actions manifest, leaving stakeholders to navigate the complexities of this evolving financial landscape.
