President Donald Trump has called for credit-card companies to cap interest rates at 10% for one year, a move that could erase billions in industry profits. The proposal directly targets major card issuers like JPMorgan Chase and Citigroup, whose earnings rely heavily on interest income from revolving balances.

Such a drastic rate cut would disrupt the core profitability of consumer lending. Banks have historically defended higher APRs as necessary to cover defaults and operational costs. A one-year cap would compress net interest margins, forcing lenders to re-evaluate risk models and potentially tighten credit access.

The threat adds regulatory uncertainty to the sector's outlook. Investors will watch for official policy proposals and bank responses. A prolonged rate cap could spur a shift toward fee-based revenue models, altering the competitive landscape for credit-card issuers.