Shares in banks and credit card firms fell after former U.S. President Donald Trump called for a cap on credit card interest rates. In a post on Truth Social Friday, Trump proposed limiting interest rates on credit cards to 10% for one year, starting January 20, 2026.

The proposal immediately impacted the financial sector. Barclays, a UK bank with a significant U.S. credit card business, saw its shares decline by 3.5%. U.S. firms including American Express, Visa, and Mastercard also experienced declines in early trading.

Trump's statement revived an idea he initially floated during his 2024 presidential campaign. "Effective January 20, 2026, I, as President of the United States, am calling for a one year cap on Credit Card Interest Rates of 10," he wrote. He did not elaborate on the mechanism for implementing such a cap or its legal enforceability.

Industry groups quickly voiced concerns. U.S. banking associations argued that capping interest rates would restrict access to credit for consumers and have "devastating" consequences for millions of families and small businesses.

The average interest rate for credit cards in the U.S. currently hovers around 20%. The proposed cap of 10% represents a significant reduction, potentially impacting the profitability of credit card issuers and the availability of credit for higher-risk borrowers. The potential impact on rewards programs, which are often funded by interest revenue, is also a concern.

The Consumer Financial Protection Bureau (CFPB) regulates many aspects of the credit card industry, but the legal authority to impose a nationwide interest rate cap is complex and potentially subject to legal challenges. It remains unclear how Trump's proposal would be implemented and whether it could overcome potential legal hurdles. The financial industry is closely monitoring the situation for further details and potential policy responses.