Shares in major credit card lenders tumbled in early trading Monday after President Trump late Friday proposed a 10% cap on the fees these cards charge customers.

Shares of Capital One (COF) and Synchrony Financial (SYF) fell as much as 10% in premarket trading on Monday. American Express (AXP) and Citigroup (C) shares were down about 4% before the open, while JPMorgan Chase (JPM) and Bank of America (BAC) shares were off closer to 2%.

“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%,” Trump wrote Friday night in a post on Truth Social.

Read more: How to find the best credit card interest rates

It's not clear how Trump plans to cap card fees without Congress first passing legislation. But the president doubled down on his proposal on Sunday while speaking with reporters on Air Force One as he returned to D.C. from Florida.

“They really abused the credit cards,” he said of major card lenders, adding that if rates aren’t capped by his deadline, “then they’re in violation of the law," according to a Bloomberg report.

Without legislation, it's not clear how credit card issuers would violate the law if they resisted lowering fees.

"Yikes," Wells Fargo analyst Mike Mayo wrote to clients on Monday.

The toll of a one-year 10% cap on fees would hit large bank earnings before tax by an estimated 5%-18%, and "wipe out earnings" for lenders that exclusively focus on credit cards and related services, such as Capital One and Synchrony Financial, according to Wells Fargo.

Credit card interest rates have jumped significantly in recent years and far exceed the rate paid on other consumer loans. The average rate was 22.30%, according to the most recent Federal Reserve data, up from 16.28% in 2020. Credit card lenders earn interest and fees from merchants and customers when they transact. They can also charge customers additional fees.

Politicians on both sides of the aisle, including Sens. Bernie Sanders (I-Vt.) and Josh Hawley (R-Mo.), have taken up the issue and applauded some limitations on high fees in the past. Last year, Sanders introduced a credit card cap bill with support from Hawley. In 2024, Trump proposed a 10% cap on credit card fees while campaigning for his second term in office.

The credit card cap proposal comes as a black eye in what was shaping up to be the financial industry's most favorable regulatory environment in a generation.

Five banking industry trade groups, including the American Bankers Association, Bank Policy Institute, and Independent Community Bankers of America, quickly fired off a warning within hours of Trump's social media post on the cap. They argue that such a curb would hit lower income borrowers most during a time of fragility for the US economy.

“Evidence shows that a 10% interest rate cap would reduce credit availability and be devastating for millions of American families and small business owners who rely on and value their credit cards,” the trade groups wrote.

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

Read more: Buy now, pay later vs. credit cards: Which should you use for your next purchase?

On the other hand, the cap could have "major positive ramifications" for fintech providers of buy now, pay later loans, including Affirm (AFRM), according to Mizuho analyst Dan Dolev. Affirm's stock rose 4% early Monday.

Fourth quarter earnings season for big banks kicks off on Tuesday when JPMorgan reports. The nation's largest bank agreed to take over Goldman Sachs' Apple Card portfolio last week.

David Hollerith covers the financial sector, ranging from the country's biggest banks to regional lenders, private equity firms, and the cryptocurrency space.

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