VisaMasterCard

The 10% cap panic: Visa and Mastercard sell off, banks take the hit

Equities 5 minutes to read
Ruben Dalfovo
Ruben Dalfovo

Investment Strategist

Key takeaways

  • The proposed 10% cap targets bank interest income, not Visa and Mastercard’s core transaction fees.

  • Visa and Mastercard are payment networks, not lenders, so the direct hit is smaller than the share move suggests.

  • The real watch-outs are second-order effects: tighter credit, shifts in payment mix, and broader fee regulation.


When a headline meets a misunderstanding

A proposed one-year cap on credit card interest rates at 10% sounds like it has a clear villain and a clear winner. Consumers win, and “credit card companies” lose.

Markets treated Visa and Mastercard as the villains anyway. On 13 January 2026, Visa closed 4.5%. Mastercard closed at 544.99 USD, down 3.8%.

The catch is that the policy is aimed at the part of the credit card system that earns interest. That is mostly the banks that issue the cards. Visa and Mastercard do not lend money to cardholders, and they do not earn the interest you pay when you carry a balance.

So why did the stocks drop like they were the ones setting the annual percentage rate (APR)? Because the market is not only reacting to what the policy targets. It is reacting to what the policy might change.

The headline gap: who earns interest, who earns fees

A credit card purchase looks simple: tap, beep, done. Behind the beep are two different businesses that often get blended together.

Business one is lending
A bank issues the card and extends credit. If you do not pay the full balance, the bank earns interest. That interest is what a 10% cap targets.

Business two is the payments network
Visa and Mastercard run the rails that move information and money between banks and merchants. They earn fees linked to payment activity, such as network services and transaction processing. They are closer to “toll roads” than “lenders.”

This matters because the proposed cap is big relative to current US pricing. Reuters reports the cap is framed as starting on 20 January 2026, and cites Federal Reserve data showing average credit card interest rates of 20.97% in November 2025. Cutting that to 10% is not trimming a hedge. It is taking a chainsaw to a revenue stream for card issuers.

If you want the simplest mental model, use this: banks own the loan, networks run the road. The policy targets the loan, but investors temporarily punished the road.

Why Visa and Mastercard still get pulled into the sell-off

Even if the direct hit is aimed at banks, there are a few realistic ways the networks can still feel it.

First, credit availability can shrink
If issuers earn less from revolving balances, they may tighten approval standards, cut credit limits, or reduce rewards. JPMorgan’s chief financial officer warned a cap could reduce access to credit and ripple into the wider economy.
Less credit can mean fewer purchases for some households, especially at the lower end of the income ladder.

Second, spending can shift, not vanish
Some consumers may move from credit to debit if credit becomes harder to get or less rewarding. Others may use “buy now, pay later” providers. The key point is that many of those transactions still run through Visa and Mastercard rails. That can soften the blow, even if the mix changes.

Third, investors fear the “next regulation,” not just this one
A rate cap is dramatic, but it is not the most direct policy risk for the networks. The longer-running risk is fee and routing regulation, meaning rules that influence how card payments are routed and what merchants pay. This is where Visa and Mastercard sit closer to the policy bullseye over time.

That is why a headline about bank interest income can still hit network shares. The market is pricing not only what is written, but what it worries comes next.

Risks to watch without losing sleep

The first risk is political follow-through. A proposal can move markets even before it becomes law. But its real impact depends on enforcement details and legislative traction. Until investors see a path from social post to statute, uncertainty does most of the damage.

The second risk is a genuine credit tightening cycle. If issuers cut limits and approvals, some consumer segments spend less, and transaction growth can slow. Watch issuer language on “credit availability” and “delinquencies,” and watch retail sales trends.

The third risk is the slow one: broader payment fee regulation. This is not about APR. It is about the economics of card acceptance and routing. If that debate heats up, it matters more for the networks than a one-year interest cap.

Investor playbook

  • Watch the next earnings calls for payment volume trends and cross-border activity, not political quotes.

  • Track issuer behaviour: tighter credit limits and weaker rewards are early signs of pressure from a cap.

  • Separate “policy risk” from “demand risk”: a weaker economy hurts volumes more than a rule aimed at lenders.

  • Keep a timeline: proposals move fast, laws move slow. Re-price the risk only when details become binding.

The real test is spending and credit, not headlines

The market’s first reaction to the 10% cap story is simple: sell anything that smells like credit cards. That is fast, emotional, and sometimes useful for traders.

Long-term investors need the slower version. Banks lend money and earn interest. Visa and Mastercard move transactions and earn fees. On 13 January 2026, the stocks traded as if those were the same business. They are not.

The real question is not “who gets blamed in the headline.” It is “what changes in spending, credit access, and regulation over the next few quarters.” The toll road still works tomorrow morning, even if the political traffic is noisy today.






This material is marketing content and should not be regarded as investment advice. Trading financial instruments carries risks and historic performance is not a guarantee of future results.

The instrument(s) referenced in this content may be issued by a partner, from whom Saxo receives promotional fees, payment or retrocessions. While Saxo may receive compensation from these partnerships, all content is created with the aim of providing clients with valuable information and options.

Outrageous Predictions 2026

01 /

  • Switzerland's Green Revolution: CHF 30 Billion Initiative by 2050

    Outrageous Predictions

    Switzerland's Green Revolution: CHF 30 Billion Initiative by 2050

    Katrin Wagner

    Head of Investment Content Switzerland

    Switzerland launches a CHF 30 billion energy revolution by 2050, rivaling Lindt & Sprüngli's market ...
  • Dumb AI triggers trillion-dollar clean-up

    Outrageous Predictions

    Dumb AI triggers trillion-dollar clean-up

    Jacob Falkencrone

    Global Head of Investment Strategy

    Agentic AI systems are deployed across all sectors, and after a solid start, mistakes trigger a tril...
  • The Swiss Fortress – 2026

    Outrageous Predictions

    The Swiss Fortress – 2026

    Erik Schafhauser

    Senior Relationship Manager

    Swiss voters reject EU ties, boosting the Swiss Franc and sparking Switzerland's "Souveränität Zuers...
  • Dollar dominance challenged by Beijing’s golden yuan

    Outrageous Predictions

    Dollar dominance challenged by Beijing’s golden yuan

    Charu Chanana

    Chief Investment Strategist

    Beijing does an end-run around the US dollar, setting up a framework for settling trade in a neutral...
  • SpaceX announces an IPO, supercharging extraterrestrial markets

    Outrageous Predictions

    SpaceX announces an IPO, supercharging extraterrestrial markets

    John J. Hardy

    Global Head of Macro Strategy

    Financial markets go into orbit, to the moon and beyond as SpaceX expands rocket launches by orders-...
  • Quantum leap Q-Day arrives early, crashing crypto and destabilizing world finance

    Outrageous Predictions

    Quantum leap Q-Day arrives early, crashing crypto and destabilizing world finance

    Neil Wilson

    Investor Content Strategist

    A quantum computer cracks today’s digital security, bringing enough chaos with it that Bitcoin crash...
  • A Fortune 500 company names an AI model as CEO

    Outrageous Predictions

    A Fortune 500 company names an AI model as CEO

    Charu Chanana

    Chief Investment Strategist

    Can AI be trusted to take over in the boardroom? With the right algorithms and balanced human oversi...
  • Taylor Swift-Kelce wedding spikes global growth

    Outrageous Predictions

    Taylor Swift-Kelce wedding spikes global growth

    John J. Hardy

    Global Head of Macro Strategy

    Next year’s most anticipated wedding inspires Gen Z to drop the doomscrolling and dial up the real w...
  • Obesity drugs for everyone – even for pets

    Outrageous Predictions

    Obesity drugs for everyone – even for pets

    Jacob Falkencrone

    Global Head of Investment Strategy

    The availability of GLP-1 drugs in pill form makes them ubiquitous, shrinking waistlines, even for p...
  • Despite concerns, U.S. 2026 mid-term elections proceed smoothly

    Outrageous Predictions

    Despite concerns, U.S. 2026 mid-term elections proceed smoothly

    John J. Hardy

    Global Head of Macro Strategy

    In spite of outstanding threats to the American democratic process, the US midterms come and go cord...

This content is marketing material.

None of the information provided on this website constitutes an offer, solicitation, or endorsement to buy or sell any financial instrument, nor is it financial, investment, or trading advice. Saxo Bank Switzerland and its entities within the Saxo Bank Group provide execution-only services, with all trades and investments based on self-directed decisions. Analysis, research, and educational content is for informational purposes only and should not be considered advice nor a recommendation.

Saxo Bank Switzerland’s content may reflect the personal views of the author, which are subject to change without notice. Mentions of specific financial products are for illustrative purposes only and may serve to clarify financial literacy topics. Content classified as investment research is marketing material and does not meet legal requirements for independent research.

Saxo Bank Switzerland partners with companies that provide compensation for promotional activities conduced on its platform. Additionally, Saxo Bank Switzerland has agreements with certain partners who provide retrocession contingent upon clients purchasing specific products offered by these partners.

While Saxo Bank Switzerland receives compensation from these partnerships, all educational and research content remains focused on providing information to clients.  

Before making any investment decisions, you should assess your own financial situation, needs, and objectives, and consider seeking independent professional advice. Saxo Bank Switzerland does not guarantee the accuracy or completeness of any information provided and assumes no liability for any errors, omissions, losses, or damages resulting from the use of this information.

The content of this website represents marketing material and is not the result of financial analysis or research. It has therefore not been prepared in accordance with directives of the Swiss Bankers Association designed to promote the independence of financial research and is not subject to any prohibition on dealing ahead of the dissemination of the marketing material.

Saxo Bank (Schweiz) AG
The Circle 38
CH-8058
Zürich-Flughafen
Switzerland

Contact Saxo

Select region

Switzerland
Switzerland

All trading carries risk. Losses can exceed deposits on margin products. You should consider whether you understand how our products work and whether you can afford to take the high risk of losing your money. To help you understand the risks involved we have put together a general Risk Warning series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. The KIDs can be accessed within the trading platform. Please note that the full prospectus can be obtained free of charge from Saxo Bank (Switzerland) Ltd. or the issuer.

This website can be accessed worldwide however the information on the website is related to Saxo Bank (Switzerland) Ltd. All clients will directly engage with Saxo Bank (Switzerland) Ltd. and all client agreements will be entered into with Saxo Bank (Switzerland) Ltd. and thus governed by Swiss Law. 

The content of this website represents marketing material and has not been notified or submitted to any supervisory authority.

If you contact Saxo Bank (Switzerland) Ltd. or visit this website, you acknowledge and agree that any data that you transmit to Saxo Bank (Switzerland) Ltd., either through this website, by telephone or by any other means of communication (e.g. e-mail), may be collected or recorded and transferred to other Saxo Bank Group companies or third parties in Switzerland or abroad and may be stored or otherwise processed by them or Saxo Bank (Switzerland) Ltd. You release Saxo Bank (Switzerland) Ltd. from its obligations under Swiss banking and securities dealer secrecies and, to the extent permitted by law, data protection laws as well as other laws and obligations to protect privacy. Saxo Bank (Switzerland) Ltd. has implemented appropriate technical and organizational measures to protect data from unauthorized processing and disclosure and applies appropriate safeguards to guarantee adequate protection of such data.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc.