Does Trump’s 10% Credit Card Rate Cap Make Visa and Mastercard a Buy? – Yahoo Finance

• Visa (V) and Mastercard (MA) operate as payment networks that earn transaction fees rather than interest income. Their business models insulate them from Trump’s proposed 10% credit card rate cap.

• Visa and Mastercard could face mixed short-term effects as reduced credit availability might curb transactions but lower rates could boost consumer spending volumes.

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President Donald Trump announced on his social media platform Truth Social that he will impose a one-year cap on credit card interest rates at 10%, effective Jan. 20, the one-year anniversary of his second inauguration. He cited affordability concerns and criticized rates of 20% to 30% under the prior administration.

This move represents yet another unprecedented government intrusion into the marketplace by his administration, potentially disrupting how banks price credit and manage risk. While aimed at easing consumer burdens, it raises questions about enforcement, as Trump provided no details on implementation — whether through executive action or congressional legislation. Banking groups quickly opposed it, warning of reduced credit availability.

Yet, with credit card issuers now in the crosshairs, should investors buy Visa (NYSE:V) and Mastercard (NYSE:MA), since they are merely payment processors and should not be covered by the edict?

The Trump administration has pursued several policies that interfere with free market operations. These include imposing sweeping tariffs on imports, which have raised costs for businesses; taking stakes in several companies for national security or strategic industries; announcing steps to ban institutional investors from buying more single-family homes to address housing affordability; and now proposing a 10% cap on credit card interest rates, overriding market-driven pricing.

Over the past year, Trump has also taken other actions that shocked markets, often to their detriment. These include abrupt trade policy shifts and regulatory overhauls that increased volatility in sectors such as technology and manufacturing. Stock indices dipped multiple times in response to unexpected announcements.

Trump first floated the 10% cap idea during his 2024 campaign, promising a temporary limit to combat high rates. In 2025, Congress saw bills introduced to enact it, including S.381, the 10 Percent Credit Card Interest Rate Cap Act, introduced by Sen. Bernie Sanders, which temporarily caps rates at 10%. A similar House bill, H.R.1944, was introduced by Rep. Alexandria Ocasio-Cortez.