Visa, MasterCard Could Be Hurt by Lower Card Usage
NEW YORK (AP) - Americans have reached for their credit cards less often this year. That’s bad news for Visa and MasterCard, which report their quarterly earnings Wednesday.
MasterCard is scheduled to report results before the stock market opens, and Visa plans to release results after the market closes.
WHAT TO WATCH FOR: Consumer spending, which accounts for 70 percent of economic growth, rose 2.9 percent from January through March, the fastest pace in more than a year.
That would suggest a great start to the year for Visa and MasterCard, which process credit card and debit card payments. But while Americans spent more, they charged less. Credit card charges fell in January and February by $5 billion, according to the Federal Reserve.
The card companies should be helped by an increase in card use by overseas customers and by affluent cardholders. Sales of jewelry and other baubles have remained high at upscale retailers like Saks Inc. and Tiffany & Co. American Express’ well-heeled cardholders charged 12 percent more in the first three months of this year than a year earlier.
WHY IT MATTERS: Visa and MasterCard are two of the world’s largest processors of debit card and credit card payments.