By Jacob Sonenshine

President Donald Trump's Friday call for a 10% cap on credit-card rates has hit a host of financial stocks hard. Buy them.

Stocks of companies that rely on credit-card revenue have fallen. Citigroup, Capital One Financial, U.S. Bancorp, and Synchrony Financial are down between 2% and 9% so far this week. American Express has dipped 4.5%. Visa and Mastercard are both down 6%.

Those moves are likely to reverse course, presenting an opportunity for a lucrative trade for buyers.

Trump's wish is unlikely to come to fruition. He said on Truth Social that he wants the cap, which would cut rates roughly in half from around 20% today, to go into effect for a year, but such a change can't happen via an executive order.

Congress would have to act. Legislators aren't likely to make such a move.

Bank analysts have already published notes saying such a rule would make the credit-card business so unprofitable that many companies would exit it. Jeremy Barnum, chief financial officer at JPMorgan Chase, backed up that view.

Speaking after the bank reported a higher adjusted profit than expected, Barnum said JPMorgan would have to significantly cut back on its card business if rates were capped. That would restrict consumers' ability to access credit, which is the opposite of what Trump wants as he seeks to address concern about affordability.

Trump's wish has a "very low chance of law passing based on our weekend discussions," writes Wells Fargo analyst, Mike Mayo. He said that while Trump's post does raise regulatory risks for the financial sector, the damage is likely to be limited given the administration's larger push to deregulate the banking system.

That turns the focus to what could bring a recovery in these stocks. Trump might reverse his position, or signs may emerge that his social media post is more bark than bite. Or he could move on from the credit- card issue as the administration pursues its many other goals, allowing the market to assume the card situation is a nonissue.

Another potential positive for the stocks is earnings. Excluding Citigroup and JPMorgan, all of the companies mentioned above report earnings in the second half of January, starting next week. Citi reports Wednesday morning and JPMorgan's results came out Tuesday.

All those stocks now look more attractive. Although their businesses aren't likely to change, their shares are trading at significant discounts to where they were before Trump's post.

For bank stocks, "if this does end up being a trial balloon that ends up not proceeding, then it stands to reason that you could see some relief, " Bill Hebel, bank analyst at 22V Research, said of Trump's post.

Mastercard and Visa look particularly interesting. They receive fees on transactions processed via their networks, but don't collect interest income, so they don't have any direct exposure to lower rates. That means that even in the unlikely event that legislation limiting the rates that credit-card companies can charge become law, the pair wouldn't be directly affected.

Take a chance on these stocks.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

By Jacob Sonenshine

President Donald Trump's Friday call for a 10% cap on credit-card rates has hit a host of financial stocks hard. Buy them.

Stocks of companies that rely on credit-card revenue have fallen. Citigroup, Capital One Financial, U.S. Bancorp, and $Synchrony Financial(SYF-B)$ are down between 2% and 9% so far this week. American Express has dipped 4.5%. Visa and Mastercard are both down 6%.

Those moves are likely to reverse course, presenting an opportunity for a lucrative trade for buyers.

Trump's wish is unlikely to come to fruition. He said on Truth Social that he wants the cap, which would cut rates roughly in half from around 20% today, to go into effect for a year, but such a change can't happen via an executive order.

Congress would have to act. Legislators aren't likely to make such a move.

Bank analysts have already published notes saying such a rule would make the credit-card business so unprofitable that many companies would exit it. Jeremy Barnum, chief financial officer at JPMorgan Chase, backed up that view.

Speaking after the bank reported a higher adjusted profit than expected, Barnum said JPMorgan would have to significantly cut back on its card business if rates were capped. That would restrict consumers' ability to access credit, which is the opposite of what Trump wants as he seeks to address concern about affordability.

Trump's wish has a "very low chance of law passing based on our weekend discussions," writes Wells Fargo analyst, Mike Mayo. He said that while Trump's post does raise regulatory risks for the financial sector, the damage is likely to be limited given the administration's larger push to deregulate the banking system.

That turns the focus to what could bring a recovery in these stocks. Trump might reverse his position, or signs may emerge that his social media post is more bark than bite. Or he could move on from the credit- card issue as the administration pursues its many other goals, allowing the market to assume the card situation is a nonissue.

Another potential positive for the stocks is earnings. Excluding Citigroup and JPMorgan, all of the companies mentioned above report earnings in the second half of January, starting next week. Citi reports Wednesday morning and JPMorgan's results came out Tuesday.

All those stocks now look more attractive. Although their businesses aren't likely to change, their shares are trading at significant discounts to where they were before Trump's post.

For bank stocks, "if this does end up being a trial balloon that ends up not proceeding, then it stands to reason that you could see some relief, " Bill Hebel, bank analyst at 22V Research, said of Trump's post.

Mastercard and Visa look particularly interesting. They receive fees on transactions processed via their networks, but don't collect interest income, so they don't have any direct exposure to lower rates. That means that even in the unlikely event that legislation limiting the rates that credit-card companies can charge become law, the pair wouldn't be directly affected.

Take a chance on these stocks.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

By Jacob Sonenshine

President Donald Trump's Friday call for a 10% cap on credit-card rates has hit a host of financial stocks hard. Buy them.

Stocks of companies that rely on credit-card revenue have fallen. Citigroup, Capital One Financial, U.S. Bancorp, and Synchrony Financial are down between 2% and 9% so far this week. American Express has dipped 4.5%. Visa and Mastercard are both down 6%.

Those moves are likely to reverse course, presenting an opportunity for a lucrative trade for buyers.

Trump's wish is unlikely to come to fruition. He said on Truth Social that he wants the cap, which would cut rates roughly in half from around 20% today, to go into effect for a year, but such a change can't happen via an executive order.

Congress would have to act. Legislators aren't likely to make such a move.

Bank analysts have already published notes saying such a rule would make the credit-card business so unprofitable that many companies would exit it. Jeremy Barnum, chief financial officer at JPMorgan Chase, backed up that view.

Speaking after the bank reported a higher adjusted profit than expected, Barnum said JPMorgan would have to significantly cut back on its card business if rates were capped. That would restrict consumers' ability to access credit, which is the opposite of what Trump wants as he seeks to address concern about affordability.

Trump's wish has a "very low chance of law passing based on our weekend discussions," writes Wells Fargo analyst, Mike Mayo. He said that while Trump's post does raise regulatory risks for the financial sector, the damage is likely to be limited given the administration's larger push to deregulate the banking system.

That turns the focus to what could bring a recovery in these stocks. Trump might reverse his position, or signs may emerge that his social media post is more bark than bite. Or he could move on from the credit- card issue as the administration pursues its many other goals, allowing the market to assume the card situation is a nonissue.

Another potential positive for the stocks is earnings. Excluding Citigroup and JPMorgan, all of the companies mentioned above report earnings in the second half of January, starting next week. Citi reports Wednesday morning and JPMorgan's results came out Tuesday.

All those stocks now look more attractive. Although their businesses aren't likely to change, their shares are trading at significant discounts to where they were before Trump's post.

For bank stocks, "if this does end up being a trial balloon that ends up not proceeding, then it stands to reason that you could see some relief, " Bill Hebel, bank analyst at 22V Research, said of Trump's post.

Mastercard and Visa look particularly interesting. They receive fees on transactions processed via their networks, but don't collect interest income, so they don't have any direct exposure to lower rates. That means that even in the unlikely event that legislation limiting the rates that credit-card companies can charge become law, the pair wouldn't be directly affected.

Take a chance on these stocks.

Write to Jacob Sonenshine at jacob.sonenshine@barrons.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

January 13, 2026 11:47 ET (16:47 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.