Capital One stock fell more than 6% on Monday after President Donald Trump targeted a key way our favorite credit card issuer makes money. Capital One’s decline followed President Trump’s call for a one-year 10% cap on credit card interest rates, effective Jan. 20. The president did not provide details on how such a cap would work in a post on Truth Social late Friday. It requires Congressional approval, but President Trump told reporters on Sunday that it would be “a violation of the law” if banks did not take action by the deadline. This proposal is not at all surprising given that President Trump criticized high credit card interest rates during his 2024 presidential campaign. A bipartisan bill has also been introduced that would cap credit card interest rates at 10%, which is significantly lower than the average of 19.65% reported by Bankrate. Other credit card companies such as American Express and “buy now, pay later” companies such as Affirm also saw their stock prices fall on the news. Wall Street analysts expressed skepticism about President Trump’s plan. JPMorgan described the proposal as a “high-severity, low-probability risk” that, if implemented, “would fundamentally reshape the card industry and significantly reduce issuer profitability and consumer access to credit.” JPMorgan raised its price target on Capital One from $237 to $256 as part of its fourth-quarter consumer finance preview. There is no sudden movement in Capital One, which fell below session lows in afternoon trading. “We’re not selling on this, we’re not necessarily endorsing it,” Jeff Marks, the club’s director of portfolio analysis, said during Monday’s morning meeting. “We’re just here to stay until the storm subsides,” Jim Cramer said on “Squawk on the Street” early Monday. “Ask yourself, ‘How many companies would issue a credit card knowing that there’s a 10% limit?'” The answer is no, because the losses are too great. ” Banks are not the only ones that could be hurt if the cap is introduced. Jim said so will the economy. Access to credit tightens by reducing incentives to lend, resulting in consumers spending less or relying on other forms of unsecured debt. “I don’t know what the president’s strategy is. If you want to crash the market, just say it,” Jim added. “It’s unfortunate. We’re sitting here thinking the economy is pretty good, but the president is so dissatisfied that we have to let the market fall.”In addition to Capital One, Wells Fargo, which also issues credit cards, fell nearly 1% on the news. CEO Charlie Scharf said credit cards are a vehicle for growth. That may change. But Goldman Sachs will come out unscathed because it reached an agreement last week to transfer Apple Card to JPMorgan Chase. The stock price of Goldman, which is also the name of the portfolio, initially fell in response to Trump’s proposal, but quickly reversed and rose. Although the year had started well and he was picking up where 2025 left off, Monday was a big jolt on the road. Goldman has soared more than 53% in the last year, while Wells Fargo has soared 32%. Capital One secured a profit of about 35% in 2025. Investor sentiment was supported by lower interest rates, increased trading activity on Wall Street, loosening regulations and the resilience of U.S. consumers. In Capital One’s case, the credit card issuer’s blockbuster $35 billion acquisition of Discover Financial, which closed in May, also boosted its stock price. We will listen closely and read management’s comments on this issue during the bank’s earnings season. Wells Fargo and Goldman will report their results this Wednesday and Thursday. Capital One is scheduled to be released on January 22nd (Jim Cramer’s Charitable Trust is long COF, WFC, GS, AAPL. See here for a complete list of stocks.) As a subscriber to Jim Cramer’s CNBC Investing Club, you will receive trade alerts before Jim Cramer makes a trade. After Jim sends a trade alert, he waits 45 minutes before buying or selling stocks in his charitable trust’s portfolio. If Jim talks about a stock on CNBC TV, he will issue a trade alert and then wait 72 hours before executing the trade. The above investment club information is subject to our Terms of Use and Privacy Policy, along with our disclaimer. No fiduciary duties or obligations exist or arise from your receipt of information provided in connection with the Investment Club. No specific results or benefits are guaranteed.
