Sydney, 12 January 2026, 10:57 AEDT — Regular session
Shares of Zip Co Ltd (ASX: ZIP) climbed up to 6.4%, hitting A$3.80 by 10:42 a.m. AEDT on Monday. The rise continued from an early jump at the open, with buy-now-pay-later stocks gaining ground in consumer finance. 1
This matters because Zip’s stock reacts heavily to sentiment around U.S. consumer credit, not just its own performance. Changes in card lending rules or pricing can alter the borrower pool BNPL companies target, as well as how much it costs to fund them.
This comes at a tricky time for investors assessing credit risk. BNPL offers short-term credit at checkout, usually interest-free for buyers, yet losses can spike quickly as budgets get tighter.
U.S. President Donald Trump announced Friday he plans to cap credit card interest rates at 10% for one year, starting Jan. 20, but didn’t specify how the cap would be enforced. Brian Jacobsen, chief economic strategist at Annex Wealth Management, cautioned that if issuers can’t price risk, they’ll likely cut credit lines. He added, “Buy now pay later firms and payday lenders might love this proposal.” 2
The takeaway for markets is straightforward: when mainstream credit tightens slightly, spending shifts toward instalment products. This doesn’t necessarily boost volumes, but it does alter approval patterns and where fees and losses end up.
With Zip, the focus won’t stay on the initial surge. Traders are zeroing in on the details: how funding costs shape up, repayment patterns, and the impact of bad debts—those customers who fall behind. These factors usually weigh heavier than a single-day policy shock.
Competition isn’t sitting still. Block-owned Afterpay and U.S. rival Affirm are the clear benchmarks, but the real wildcard is how banks adjust approvals and limits if Washington pushes ahead with rate caps.
It can swing the other way, too. If the cap never gets formalized, the trade could unwind fast. And if lenders react by tightening credit across the board, retail spending might take a hit — a headache for any pay-at-the-till lender.
Zip announced Monday that it will release its half-year results ending Dec. 31, 2025, on Feb. 19, followed by a conference call at 10:00 a.m. AEDT. Investors are keen to see how growth and credit trends are shaping up in its key markets of Australia/New Zealand and the U.S.
