Barclays and US Bank stocks drop after Trump criticizes credit card interest rates

US Bank Stocks Drop After Trump Pushes for Credit Card Rate Cap

Photographer: Jaimi Joy/Bloomberg

Bank stocks with significant credit card operations in the United States saw sharp declines after President Donald Trump announced that financial institutions would be acting illegally if they failed to comply with his proposal to limit credit card interest rates to 10% for a year.

This announcement has heightened political scrutiny on major card issuers such as Barclays Plc, JPMorgan Chase & Co., Capital One Financial Corp., and Citigroup Inc. In recent years, credit card interest rates have hovered above 20%, drawing bipartisan attention from lawmakers who have introduced legislation to address the issue, despite strong opposition from the banking sector.

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Barclays experienced a drop of up to 4.8% in early London trading on Monday, marking its steepest single-day decline since October 17.

Before the US market opened, Capital One shares tumbled 10%, American Express fell by 4.9%, Citigroup slid 4.3%, JPMorgan lost 3%, and Wells Fargo & Co. was down 2.4%.

Credit cards play a central role in Barclays’ US consumer banking division, which serves about 20 million Americans and offers a range of co-branded, small business, and private label cards. The bank has expanded its US credit card portfolio in recent years, acquiring the General Motors co-branded cards and taking over Gap Inc.’s card business from Synchrony Financial.

Bloomberg Intelligence Insight

According to Bloomberg Intelligence, Barclays would be the most affected European bank if the US were to impose a cap or restriction on credit card interest rates. The US consumer banking arm is projected to bring in £3.6 billion in revenue in 2025, accounting for 12% of the group’s total, but only 5% of pretax profit, with credit cards being a major contributor. However, it remains uncertain whether Trump’s call for a 10% interest rate ceiling will be fully implemented, given the influence of US banking lobbyists.

— Phil Richards

Speaking to reporters aboard Air Force One on Sunday, Trump reiterated his demand that credit card companies reduce rates to 10% for a year, setting a compliance deadline of January 20.

Trump warned that if issuers do not comply by the deadline, “they’re breaking the law. Some are charging nearly 30%. Many people are unaware they’re paying such high rates—they’re working hard and don’t realize it.”

A spokesperson for Barclays declined to provide a statement.

(This article has been updated to include pre-market trading activity.)

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