New York, Jan 12, 2026, 15:08 EST — Regular session
- Bread Financial shares dropped roughly 11% amid a selloff in credit-card lenders triggered by news of rate caps.
- Trump proposed a one-year 10% cap on credit card interest rates beginning Jan. 20, but offered no details on how it would be enforced.
- Investors are focused on both the legal and political developments, as well as what lenders reveal during earnings calls.
Bread Financial Holdings’ shares dropped 10.8% to $71.65 in afternoon trading Monday, hitting a low of $70.06 earlier in the session.
The move came after President Donald Trump proposed capping credit card interest rates at 10% for one year, beginning Jan. 20. However, Trump didn’t explain how he would enforce compliance among companies. 1
Why it matters now: Credit cards function as “revolving credit,” letting borrowers carry balances and pay them off gradually. Issuers depend on interest income both to cover defaults and to finance perks. Truist Securities cautioned that the proposal “would swing the business to unprofitable if enacted,” with subprime cards facing the biggest blow. 2
The selloff hit consumer-credit stocks hard. Synchrony Financial plunged 8.7%, Capital One tumbled 7.4%, and American Express declined 4.5%.
Some analysts cast doubt on whether the proposal can advance. “It would take an Act of Congress for such rate caps to be in place,” UBS Global noted, warning that an executive order would probably trigger significant legal battles. The same report highlighted the difference between the suggested cap and current card rates — the Federal Reserve’s consumer credit data showed average credit-card interest rates at 20.97% in November. 3
For Bread Financial, the stakes are clear. Such a low cap would push issuers to reconsider both their lending targets and pricing — even if they shift costs elsewhere, like fees, limits, or stricter approval standards.
But this political angle might not last. Should Congress stay out of it, Monday’s drop could prove more about risk-off moves and reaction to headlines than a shift in earnings expectations.
Bread Financial announced it will hold its Q4 and full-year 2025 earnings call on Jan. 29 at 8:30 a.m. ET. Investors are expected to focus on credit trends and the company’s take on policy risks tied to card pricing. 4
The broader market remained uneven. The S&P 500 held steady in late morning trade, while financials slipped around 1%. Investors are gearing up for Tuesday’s U.S. CPI data and the kickoff of major bank earnings, starting with JPMorgan. 5
Traders are eyeing whether BFH can hold steady into the close and how other card lenders react to any Washington developments. The key date to watch is Jan. 29, when management reports earnings with new figures—and almost certainly faces fresh questions on rate caps.
