3 Stocks That Could Win Big From a 10% Cap on Credit Card Rates

Key Points

• A bipartisan bill to cap credit card interest rates at 10% was introduced in Congress, which was also supported by President Trump during his reelection campaign in 2024.
• While the bill may be popular, no attempts to cap interest rates for credit cards have ever passed in Congress.
• A 10% cap would trigger banks to tighten credit standards and raise fees, locking out more of the underbanked population.

A bipartisan bill was introduced to immediately place a 10% maximum limit/cap on credit card interest rates. The legislation was introduced by representatives Anna Paulina Luna of Florida and Alexandria Ocasio-Cortez of New York. It was also co-sponsored and introduced to the Senate by Senator Bernie Sanders and co-sponsored by Senator Josh Hartley and Senator Jeff Merkley. President Trump also supported the 10% credit card cap during his reelection campaign.

As cited on Representative Cortez’s page, “While banks borrow at the federal interest rate of 4.25%, credit card interest rates have nearly doubled over the last decade to 23.8%, allowing credit card companies to reap massive profits while consumers struggle to keep up with debt.” The ramifications, if passed, would ripple through the finance sector and retail/wholesale sector, producing winners and losers. Here are 3 stocks that could be benefactors.

PayPal: Consumers Would Seek Alternative Payment Transaction Platforms   

If a 10% cap on credit card interest rates were passed, credit card issuers like banks would tighten their credit and lending standards. This could lock out many consumers as higher credit scores may be needed to qualify for credit cards. Payment platform operator PayPal Holdings Inc. NASDAQ: PYPL is a leading fintech that could fill the gap especially for the underbanked population that wouldn’t meet the raised lending criteria from credit card issuers.

Unlike credit card companies and banks, PayPal doesn’t solely rely on credit scores to determine creditworthiness. PayPal uses many different metrics, including overall credit history, utilization, PayPal history and many more non-traditional metrics. Its PayPal Working Capital service offers business loans at fixed rates that are paid automatically from a portion of every sales transaction after a grace period until the loan is fully repaid. With each repaid loan, the business continues to build up a payment history, enabling more loans, often at higher credit limits.

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PayPal Benefits From the Network Effect

While PayPal would also fall under the 10% interest rate cap, the volume of business could make up for it. The loans are not completely unsecured as PayPal gets paid transaction fees from the sales made on its platform, as well as interest on the loan and fees. As the business builds a relationship or galvanizes the relationship, it can also receive traditional loans like a PayPal Business Loan, which would take into consideration its payment and transaction history with PayPal as a whole for determining the size, interest rate and terms of a business loan.

The result is a win-win for the business and for PayPal. CEO Alex Chriss stated in the company’s Q4 conference call, “Merchants typically increase their PayPal volume by 36% after adopting PayPal Working Capital and 16% after taking a PayPal Business Loan. Our merchant lending originations were $3 billion in '24, demonstrating our leadership and that there is plenty of room to grow to support our customers. This is just one example of the services we offer that help SMBs change the trajectory of their businesses. Expanding this ecosystem of value-added services is a focus in 2025 and beyond.”

Visa: The Network Generates Revenues Regardless of Interest Rates

There is a misconception that that Visa Inc. NYSE: V is a credit card company or a credit card issuer. It is neither. Visa is a payment network and the world’s second-largest payment processor. Visa generates revenue by taking a fee from every transaction made in its network, regardless of the interest rate.

While there may be fewer credit card owners after a 10% cap, they will still collect interest rates on transactions. For many, a lower interest rate would actually incentivize them to spend more as they view the interest rate savings as "the house's money" while making more purchases and running up their balances.

Visa saw Q1 2025 revenue grow 10% year-over-year (YOY) to $9.5 billion, with a 9% YOY rise in payments volume and a 16% YOY jump in cross-border volume totals. It processed 11% more transactions YOY in the quarter.

Walmart: Lower Interest Rates Spur More Spending on Consumer Staples

With lower interest rate payments, consumers may opt to spend their "interest rate savings” on things they need before they spend on things they want.

As the largest retailer in the country, Walmart would be a benefactor for any bump in consumer spending. 

As the nation’s largest grocer, they will attract a large share of spending on consumer staples items.

Grocery sales accounted for 59.8% of total revenues in 2024, up 19.5% YOY, as it captured 37% of the U.S. online grocery market in Q2. Local stores fulfill more than 50% of online grocery orders.