TLDR
- Visa stock up 14% over the past year with Q3 earnings beating estimates at $2.98 per share.
- Trump proposed 10% credit card interest rate cap starting January 20, 2026, with no implementation details.
- Current credit card rates range from 17-18% for prime borrowers to mid-30s for subprime.
- Visa earns transaction fees not interest income, so banks would absorb the direct impact.
- Markets view the proposal as low-probability near-term risk due to lack of specifics and industry pushback.
President Trump announced a plan to cap credit card interest rates at 10% for one year. The proposal came via social media on January 9, 2026.
Trump stated the cap would start January 20. He provided no implementation details or enforcement mechanism.
Current credit card APRs range from 17-18% for excellent credit to mid-30s for subprime borrowers. A 10% cap would represent a major market restructuring.
Visa stock has gained 14% over the past year despite the policy uncertainty. Analysts maintain positive ratings with price targets around $400.
The company reported Q3 earnings that beat expectations. EPS came in at $2.98 versus estimates of $2.97. Revenue grew 11.5% year over year.
Visa raised its quarterly dividend to $0.67 per share. Several institutional investors added positions in early 2026.
How Rate Caps Affect Visa Revenue
Visa earns primarily from transaction and network fees rather than interest charges. The direct impact from a rate cap would hit issuing banks first.
Banks facing compressed interest margins might tighten lending standards. They could reduce credit availability or cut rewards programs.
Issuers might add annual fees or push for higher merchant processing fees. Any of these changes could slow transaction volumes over time.
Industry trade groups oppose the proposal strongly. The American Bankers Association warned a statutory cap could reduce credit access.
Banking groups suggest consumers denied traditional credit might turn to payday lenders. Some could resort to unregulated online lenders.
Market Response to Trump Proposal
Financial markets are not treating the proposal as imminent policy. The lack of specifics has kept investor reaction muted.
Trump did not outline whether the cap requires Congressional legislation or regulatory action. Either route faces substantial hurdles.
Research notes from early January 2026 focus on Visa’s fundamental drivers. Cross-border volumes and digital payment expansion remain primary themes.
Senator Bernie Sanders criticized Trump before the announcement. He claimed Trump previously promised to cap rates but deregulated banks instead.
Senator Josh Hawley responded positively to the proposal. He called it a “fantastic idea” and said he would vote for it.
The Bank Policy Institute released a 2025 report examining a 10% cap. The group concluded it would harm consumer credit access and force benefit cuts.
Visa’s Q3 results showed payment volume strength and cross-border travel recovery. The company continues expanding value-added services.
Analyst consensus remains Buy with forecasts projecting steady 2026 growth. Research emphasizes digitization trends and Visa’s growing services mix.
Trump floated a similar 10% cap during his 2024 campaign. Industry experts warned then it would completely reshape credit card markets.
