Trump’s Affordability Push Hits Wall Street Where It Hurts: Credit Card Profits

CNN and Bloomberg contributed to this report.

President Donald Trump’s latest affordability pledge isn’t just kicking dirt at Main Street – it’s pointing straight at Wall Street’s biggest money-makers. By vowing to cap credit card interest rates at 10%, Trump has unleashed a political and financial headache for big banks that have long counted on high rates as a reliable profit engine.

At a recent event focused on rising costs for everyday Americans, Trump promised to tackle what he calls “predatory credit card interest.” His plan would slap a 10% cap on interest rates for credit cards nationwide – a dramatic shift from today’s reality where double-digit APRs are the norm and many consumers routinely pay 20% or more.

The president frames this as a win for working families struggling with inflation and high borrowing costs – and that message resonates with voters who feel squeezed. But for Wall Street, where credit cards are big business, it’s a direct threat to a major profit stream.

Credit card interest has long been a cash cow for banks. Unlike investment banking or trading, where profits fluctuate wildly, credit card interest provides steady, predictable income – especially in an era of rising rates. According to industry analysts, the business generates tens of billions in annual revenue for large lenders.

Caps on interest rates don’t just trim profits; they reshape the economics of lending. If card issuers can’t charge higher rates to offset defaults and the cost of capital, they either tighten lending standards or find new ways to compensate – like fees or cutting rewards programs.

For Wall Street bankers and shareholders, this is more than a policy proposal: it’s a potential reshuffling of how retail lending makes money.

Big banks are already in damage-control mode. Executives have been quoted privately warning that a hard cap could lead to less credit availability for consumers, particularly those with lower credit scores. Publicly, industry groups argue rate caps could have “unintended consequences” like higher fees or reduced credit limits.

Wall Street analysts, meanwhile, are updating earnings forecasts to reflect a world where credit card spreads – the difference between what lenders pay for money and what they charge customers – are squeezed. Bloomberg notes that the threat of regulation has already started to “rain on” anticipated earnings for some big lenders, sending ripples through stock valuations tied to consumer finance arms.

Trump’s pitch is classic populism: take on a powerful financial sector that fewer and fewer Americans feel benefits them. Credit card debt is a persistent financial burden for millions of households, and steep interest rates can turn a manageable balance into a long-term sinkhole.

By targeting credit cards – a product most voters have directly encountered – Trump is putting a very relatable face on financial reform, rather than making noise about abstract regulatory systems or market mechanics.

It puts Wall Street in a tricky spot: oppose the proposal and risk being tagged as out of touch with everyday struggles; embrace it and risk undermining a core profit business.

For now, Trump’s proposal is just that – a proposal. To become law, it would need congressional approval, likely facing intense negotiation and lobbying. But the fact that it’s gaining traction in public discourse has already shifted expectations on Wall Street and among regulators.

If Congress even considers a rate cap, banks may pre-emptively alter their products – hiking annual fees, cutting rewards, tightening credit, or bundling services to make up lost interest revenue.

Trump’s affordability push hits at a core profit center for big banks: lending to everyday Americans at rates that help pad the bottom line. By making credit card rates a political target, he’s taking aim at an industry strength Wall Street has long relied on.

Whether the policy becomes reality or stays campaign rhetoric, it’s already doing something real: changing the conversation about consumer credit and forcing Wall Street to adjust its sails in a storm that might be just beginning.