How We're Playing the Controversy and Selloff in Credit Card Stocks
Forget Visa and Mastercard, we're buying these stocks instead.
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Shares of Visa (V) and Mastercard (MA) fell on Tuesday as markets weighed in on President Trump’s plan to cap interest rates charged by credit card companies.
Last week, President Trump issued a statement on Truth Social, stating that as of Jan. 20, 2026, credit card rates will be capped at 10%. According to the Federal Reserve, the average annual percentage interest rate charged by credit card providers is 22.3%.
Visa reacted by falling 3.5% on Tuesday. Shares of the San Francisco-based credit provider have now lost 7.5% since reaching a six-month closing high on Jan. 6.
Shares of Mastercard were also hit for a 3.5% loss. Both Visa and Mastercard are trading below their key 50-day (blue) and 200-day (red) moving averages, a negative sign.
While I believe these two names will bounce back, the charts of these credit card issuers simply aren't impressive. Over the past six months, shares of Visa have lost 6%, and Mastercard has fallen by 1.25%.
Visa and Mastercard haven't participated in the current rally. Therefore, let's shift our focus to two names impacted by the credit card controversy that have done very well over the past few years, and are likely to resume their prior trajectory.
Capital One Financial
Shares of Capital One Financial (COF) reached an all-time high last week, but the recent credit card controversy has knocked its shares down to its 50-day moving average (blue).
A rally back to last week’s high would see the stock climb by 12%. Capital One shares gained 36% in 2025, and 41% in 2024. Capital One is scheduled to report earnings on January 22.
JPMorgan Chase
Like Capital One, JPMorgan Chase (JPM) traded at an all-time high last week. The stock lost 4.2% on Tuesday and has fallen below its 50-day moving average (blue). Last year, JPMorgan shares returned over 40%, after rising 26.85% in 2024.
JPMorgan Chase reported earnings and revenue on Tuesday that were slightly below estimates. Thanks to the bank’s stellar track record, that stumble shouldn’t dissuade long-term investors from buying the stock.
Bottom Line
While capping credit card interest rates may sound appealing to some, it opens the door to a host of problems. For example, credit card agencies may not feel that a 10% profit is worth the risk of taking on clients with low credit scores, resulting in less available credit.
Eventually, I expect President Trump to back off on demands for lower credit card rates. Any attempt to enforce such a policy is likely to wind up in court. Capping the profits of credit providers will likely have unintended consequences.
Stocks that have been impacted by this proposed policy are likely to bounce when the policy proves to be ill-advised.
At the time of publication, Ponsi was long COF and JPM.
