Credit Card Stocks Tumble Amid Regulatory Threats, Analysts Remain Bullish
Credit card stocks faced significant pressure this week after former President Donald TRUMP proposed capping interest rates at 10% and endorsed legislation challenging Visa and Mastercard's dominance. Shares of Visa (V) and American Express (AXP) dropped 7% and 5%, respectively, while Mastercard (MA) fell 5%.
Despite the short-term volatility, analysts at William Blair and Citigroup maintain confidence in the sector's long-term resilience. Historical precedent suggests card issuers adapt to regulatory changes—financial stocks weathered similar uncertainty after the Global Financial Crisis, only to outperform the S&P 500 over the following 15 years.
The proposed Credit Card Competition Act could disrupt payment networks by requiring large banks to support alternatives to Visa and Mastercard. Market reactions echo past moments of regulatory scrutiny, but institutional investors appear to view the sell-off as transient.
