Trump Proposes 10% Credit Card Interest Cap, Impacts Major Financial Stocks
Written by Emily J. Thompson, Senior Investment Analyst
Source: seekingalpha
- Interest Rate Cap Proposal: Trump's proposal to cap credit card interest rates at 10% could benefit consumers in the short term but may lead banks to eliminate cash back programs, negatively impacting Americans who heavily rely on credit cards in the long run.
- Competition Act Impact: The Credit Card Competition Act aims to require two payment networks on a single card to reduce fees through increased competition; however, it is not expected to significantly lower swipe fees or provide cost savings for consumers.
- High-Interest Issuers Hit Hard: High-interest credit card issuers like Synchrony, OneMain Financial, and Capital One may face greater damage as they rely on interest rates to offset risk, while network operators like Visa and Mastercard profit mainly from transaction fees.
- Banking Sector Effects: Major banks such as U.S. Bancorp could see a greater impact due to potential declines in merchant processing fee revenues, and credit card companies like Visa and Mastercard may also experience residual effects from reduced transaction volumes.
Analyst Views on AXP
Wall Street analysts forecast AXP stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for AXP is 351.42 USD with a low forecast of 280.00 USD and a high forecast of 400.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
21 Analyst Rating
7 Buy
12 Hold
2 Sell
Hold
Current: 357.370
Low
280.00
Averages
351.42
High
400.00
Current: 357.370
Low
280.00
Averages
351.42
High
400.00
About AXP
American Express Company is a globally integrated payments company with card-issuing, merchant-acquiring and card network businesses. It offers products and services to a range of customers, including consumers, small businesses, mid-sized companies and large corporations around the world. Its segments include U.S. Consumer Services (USCS), Commercial Services (CS), International Card Services (ICS) and Global Merchant and Network Services (GMNS). USCS offers travel and lifestyle services as well as banking and non-card financing products. CS offers payment and expense management, banking and non-card financing products. ICS provides services to international customers, including travel and lifestyle services, and manages certain international joint ventures and its loyalty coalition business. GMNS operates a payments network that processes and settles card transactions, acquires merchants and provides multichannel marketing programs and capabilities, services and data analytics.
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.
