Bank stocks may be having a rough year but credit card stocks are on the rise and they are showing little sign of slowing down.
"They're producing revenue growth, and that's far better than many financial institutions," says Sanjay Sakhrani, analyst at Keefe Bruyette & Woods
While Bank of America, Wells Fargo, and JPMorgan Chase have all seen stagnant or falling revenue the slowdown of the US economy has not stopped credit card companies from posting strong earnings. As families struggle to keep up with finances more have begun to rely on credit and debit cards in place or cash or checks. The more these methods of payment are used the more money is the credit card ultimately makes off of their cardholders.
The only threat to the growth of the credit card industry at the moment is a new law that would place caps on “interchange” fees retailers pay to banks on debit card transactions. The measure would make it easier for business owners to operate and would force networks to compete for the opportunity to route payments. While many industry experts say that it will not have a monumental effect on the credit card industry, some fear it could seriously hurt one of the few industries succeeding in these harsh economic times.
As always, stay tuned to Credit Cards Professor for more credit card news and updates.
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