Credit Card Companies Face Bipartisan Pressure
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 13 2026
0mins
Source: CNBC
- Political Pressure Intensifies: Amid persistent inflation, Trump and Sanders have found common ground in seeking to lower credit card annual percentage rates, with Trump proposing a 10% cap and Sanders advocating for a permanent 15% cap, potentially reshaping the profitability of credit card companies.
- Cautious Industry Response: Major credit card issuers like Capital One are in a holding pattern amidst political rhetoric, fearing that if a cap is implemented, they will be compelled to cut credit lines, adversely affecting credit access for lower-income households.
- Profitability at Risk: Analysts predict that a long-term rate cap could reduce Capital One's earnings per share by 25% or wipe them out entirely, as credit card operations account for approximately 74% of its total revenue, primarily derived from interest on customer balances.
- Acquisition Impact Significant: Capital One's $35 billion acquisition of Discover last year will be affected by any interest rate limits, as Discover's credit card balances will also be impacted, further diminishing Capital One's competitive edge, especially without a robust payment network.
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Analyst Views on AXP
Wall Street analysts forecast AXP stock price to rise
21 Analyst Rating
8 Buy
12 Hold
1 Sell
Moderate Buy
Current: 305.380
Low
280.00
Averages
379.06
High
425.00
Current: 305.380
Low
280.00
Averages
379.06
High
425.00
About AXP
American Express Company is a global payments and premium lifestyle brand powered by technology. Its card-issuing, merchant-acquiring and card network businesses offer products and services to a broad range of customers, including consumers, small businesses, mid-sized companies and large corporations around the world. Its range of products and services includes credit and charge cards and complementary products and services, including travel, dining, lifestyle and expense management products and services; banking and other payment and financing products and services, including deposits and non-card lending; merchant acquisition and processing, servicing and settlement, fraud prevention, and point-of-sale marketing and information products and services, and network services. These products and services are offered through various channels, including mobile and online applications, affiliate marketing, customer referral programs, third-party service providers, and business partners.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Buyback Strategy Adjustment: Although the company has not repurchased shares for six straight quarters, it began buying back stock earlier this month, indicating a reassessment of current stock prices, particularly as the price-to-book ratio has decreased from 1.8 to 1.4.
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- Stock Buyback Decision: Berkshire has not repurchased any shares for six consecutive quarters, although it has recently begun to reconsider its buyback strategy, indicating a more cautious approach to assessing the intrinsic value of its stock, especially with the current P/B ratio at 1.4.
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See More
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- Doubling Dividends: Over the past five years, American Express has increased its dividend from $0.43 per quarter to $0.95, representing a 121% rise and an average annual growth rate exceeding 17%, although the latest increase is slower than its historical average.
- Market Performance: American Express stock has doubled in value over the past five years, with net income reaching $10.7 billion in 2025, a 45% increase from $7.4 billion in 2022, indicating significant improvement in profitability.
- Investment Appeal: Despite a dividend yield of approximately 1.3%, slightly above the S&P 500's 1.2%, American Express remains an attractive option for low-risk investors seeking quality dividend stocks due to its consistent dividend growth and strong financial results.
See More
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Dividend Increases: Major companies across financial, industrial, and technology sectors have announced significant dividend increases, with some firms raising dividends by over 15%, reflecting strong performance and confidence in future growth.
AI Demand Impact: Companies benefiting from artificial intelligence demand are seeing substantial revenue growth, with one firm expecting to double its AI revenue in the upcoming fiscal year, leading to a 20% dividend increase.
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