Shares in banks and credit card firms have fallen after US President Donald Trump called for credit card costs to be capped.

On Friday, Trump wrote on Truth Social that interest rates on cards should be limited to 10% for one year from 20 January. He did not specify how such a cap might be introduced or whether such a move would be legally enforceable.

UK bank Barclays, which has a sizeable US card business, saw its shares fall 3.5%, while US firms such as American Express, Visa and Mastercard were also lower in early trading.

US banking associations say capping rates will make it harder for people to access credit and be “devastating” for millions of families and small businesses.

The average interest rate for credit cards in the US is roughly 20%.

In his statement on social media, Trump called for limiting it to 10%, reviving an idea he had put forward 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. “Please be informed that we will no longer let the American Public be ‘ripped off’ by Credit Card Companies.”

On Sunday, speaking to reporters on Air Force One, Trump said credit card companies would be “in violation of the law” if they did not comply with his demands.

American Express’s share price fell by 4% while Visa and Mastercard’s stock dropped more than 2%. Other US lenders including JPMorgan Chase and Bank of America also saw their shares open more than 1% lower.

Forcing companies to lower their lending rates rate would “upend the basic economics of the industry,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

“Most banks would respond by cutting credit limits, closing riskier accounts, and scaling back rewards programmes, because they simply couldn’t cover losses at that price point.”

Nearly half of US households in 2022 carried credit card debt, according to the most recent survey of consumer finances by the Federal Reserve.

It found that those with a balance owed more than $6,000 (£4,454) on average – which, with interest rates around 20%, translated into roughly $100 in monthly charges.

The idea of capping credit card rates has won support from an unlikely coalition of lawmakers, uniting those on the far-left, such as Bernie Sanders, with populists that back Trump’s MAGA agenda.

But the path to bringing the proposal into force is unclear.

Similar plans have languished in Congress. The administration has also pushed to reduce the role of agencies that have regulated such issues in the past.

“Begging credit card companies to play nice is a joke,” Democrat Senator Elizabeth Warren said on X.

“I said a year ago if Trump was serious I’d work to pass a bill to cap rates. Since then, he’s done nothing but try to shut down the CFPB [Consumer Financial Protection Bureau]”.

Analysts said executive action by the White House would likely meet with legal challenge from the industry, which has had success in the past fighting regulation in the courts.

A joint statement from five US banking bodies said they shared the president’s goal “of helping Americans access more affordable credit”.

However, they added that the proposed cap would “reduce credit availability and be devastating for millions of American families and small businesses who rely on and value their credit cards, the very consumers this proposal intends to help”.

“If enacted, this cap would only drive consumers toward less regulated, more costly alternatives.”

Early last year, Sanders and fellow US senator Josh Hawley had introduced bipartisan legislation which aimed to cap interest rates on credit cards at 10% for five years, but it has yet to make it into law.

In April 2025, the Trump administration moved to throw out a regulation capping credit card late fees at $8. The rule had been brought in by President Joe Biden’s administration as part of a crackdown on “junk fees”.