Which makes no sense, since they don't even charge interest, they just process transactions. Am I missing something here or there's an opportunity for making a quick buck here? I don't think that congress will allow that idea to go anywhere anyways, either.
Visa/Mastercard down around 5% since Trump suggested capping interest rates.
byu/Immediate-Cup8172 instocks
Posted by Immediate-Cup8172
28 Comments
10% rate would cause banks to cancel higher risk cc’s. I don’t think it will happen, but a lot of things I didn’t think would happen have happened.
I took a 1% position in V at 328 about an hour ago, so shit is prob gonna hit the fan.
Buying opportunity.
No because logically it still makes sense. Because the belief is that banks will close existing accounts and deny other accounts for high risk borrowers. The high risk borrowers are ironically the ones who use the most credit cards. How does Visa and Mastercard make money? They make it on volume processing, so logic still follows that they would reduce revenue because of a drop in volume. Actually probably disproportionately if what I said is true about high risk borrowers using cards more.
Your premise may be true, but remember these stocks are overpriced compared to where they usually are. They don’t need “real” news for them to drop. I used to follow MA closely because I stupidly bought a put on them. They’d go up every day on no news then have been levitating up here for close to a year. Would not buy even with free money
As a stockholder makes no sense you want 300% rates but as consumers that are struggling it makes sense
I’m buying JPM
It makes no sense? If less people have credit cards, you don’t see how that is bad for Visa and MasterCard?
Banks would assess risk and likely not be willing to loan via credit card debt to nearly as many people.
Maybe the leads to credit card transactions reduced by 25%.
I think this opinion on Congress is a lil optimistic right now. We’re in a populism rules world for now so this policy probably does pass Congress with liberal support.
Question for Americans, do bank debit cards use the visa/MasterCard network too?
It’s reactionary. No cause for concern imo. Just follow the ERs. Visa is an intelligent complaint that prioritizes their share holders.
Just took a position in V @325
Besides what others already said: a lot of countries are moving away from Visa/Mastercard, which take ~2–3% per transaction. Stores and governments hate paying that and hate being dependent on private US card networks.
The EU is pushing the digital euro for exactly that reason. Brazil is even further; PIX (run by the central bank) has already beaten credit cards for everyday payments. It’s instant, free, and many shops actually give you a discount if you use it. Moving away from those cards is a global trend. Trump just accelerates the process.
The 10 percent seem to be supported by the Democrats also. It might pass through, I sold my V after I heard Trump proposed it.
As a stockholder, you obviously don’t want it, but 25 percent does her consumers.
Cap interest rates at 10% with more transactions and new customers. Buying opportunity for the TACO trade too.
I think the thesis is that a lot of their revenue comes from big purchases by whales on the fancy credit cards with lots of cashback and miles. Those are heavily subsidized by credit card interest. If banks get rid of those, then people may go back to using other payment methods for large purchases
Good buying opportunity because it literally won’t happen lmao. He cant just executive order his way into doing it. There is no legislation for it.
Just populist slop for regards and him throwing out whatever because of his falling approval ratings
nothing safe is anymore
Yes you’re missing something, Visa and Mastercard both charge interest in the low 20% range on their credit cards, *as well* as earning money from processing transactions.
if you haven’t started taking him seriously, you’re super behind.
Less people with access to credit equals less transactions to process and more competition for said processing.
they arent down because of the interest caps possibly being implemented. i mean that might play a role but they are down because the durbin-marshall bill has steam which would hurt their duopoly on debit and credit processing fees. if the bill doesnt pass or dies again the stock will rebound
A lot of times these just trade together call me after remember that the majority of trading is not people making decisions, it’s algorithms
But if you’re looking for some fundamental reason. If you put a 10% cap in place, even for a year, they are going to cancel a lot of credit cards. If you cancel a lot of credit cards you reduce overall transaction volume
I’m sure the admin insiders were short before the announcement
I’m sure that 10% cap will happen right after I get my stimulus check, inflation check, tariff rebate check and Venezuela dividend check!
He also mentioned resurrecting the **Credit Card Competition Act** (CCCA). The proposed legislation is aimed at breaking up or reducing the Visa/Mastercard duopoly over how credit card transactions are routed in the U.S. current system.
This move feels pretty risk‑off to me. Trump floated a 10% cap on credit‑card APRs and that spooked the market, even though it wouldn’t actually pass without Congress. Stocks hate uncertainty.
TACO