How Trump's proposed cap on credit card rates could reshape consumer lending

A proposed one-year cap on credit card interest rates backed by U.S. President Donald Trump could reduce borrowing costs for some consumers but also limit credit availability, pressure bank profits and reshape the economics of consumer lending.

Trump called for the cap on Friday, without detailing how the plan would be implemented, while Wall Street analysts said such a move would require legislation and has slim odds of getting clearance.

Financial stocks from Wall Street to Canary Wharf fell on the news on Monday.

A pullback in credit card lending, as a result of a rate cap, would weigh on consumer spending, a key driver of the U.S. economy, even as lower interest burdens offer some relief to households stuck in a revolving credit cycle.

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