Trump Proposes 10% Credit Card Interest Rate Cap, Potential Economic Impact
Written by Emily J. Thompson, Senior Investment Analyst
Source: Fool
- Interest Rate Cap Proposal: Trump has proposed a 10% cap on credit card interest rates effective January 20, 2026, significantly lower than the average 21% rate in November 2025, which may lead credit card companies to reduce lending, impacting consumer access to credit.
- High-Risk Lending Impact: Credit card companies price APRs based on borrower risk, and if the cap is implemented, it could force these companies to limit credit availability, potentially stunting economic growth, especially since consumer spending accounts for over two-thirds of U.S. GDP.
- Capital One's Yield: In Q3 2025, Capital One reported a loan portfolio yield of 13.83% with a net charge-off rate of 3.16%, resulting in a net interest margin of 8.36%, highlighting the high-risk, high-reward nature of credit card lending, which could be undermined by a rate cap.
- Economic Risk Warning: Experts warn that enforcing a 10% interest rate cap could lead to a collapse in the credit market, triggering a recession, as consumer spending is a primary driver of economic growth, and the challenge lies in managing market forces effectively.
Analyst Views on COF
Wall Street analysts forecast COF stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for COF is 257.94 USD with a low forecast of 218.00 USD and a high forecast of 290.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
18 Analyst Rating
14 Buy
4 Hold
0 Sell
Strong Buy
Current: 234.420
Low
218.00
Averages
257.94
High
290.00
Current: 234.420
Low
218.00
Averages
257.94
High
290.00
About COF
Capital One Financial Corporation is a diversified financial services holding company with banking and non-banking subsidiaries. The Company offers a broad spectrum of financial products and services to consumers, small businesses and commercial clients through a variety of channels. It operates through three segments: Credit Card, Consumer Banking and Commercial Banking. The Credit Card segment consists of its domestic consumer and small business card lending, and international card businesses in the United Kingdom and Canada. The Consumer Banking segment consists of its deposit gathering and lending activities for consumers and small businesses, and national auto lending. The Commercial Banking segment consists of its lending, deposit gathering, capital markets and treasury management services to commercial real estate and commercial and industrial customers. Its principal operating subsidiary is Capital One, National Association, which offers banking products and financial services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
