Fed Action Causes Credit Card Stocks to Fall

Credit card company stock shares were hit hard by news of the Federal Reserve’s announcement that it will be proposing rules to cut credit card fees. Analysts estimate credit card fees could be cut by as much as 90 percent, according to a New York Times article, titled “Fed Proposes Rules to Cut Debit Card Fees” by Eric Dash, published on December 16, 2010. The proposed rules could limit interchange fees to 12 cents per credit card transaction or lower.

As a result of Fed action, Visa stock shares fell by $9.75, which is a 12.7 percent drop on today, according to Market Watch in an article titled “Debit-card fee actions hit credit card companies” by John Spence, published on December 16, 2010. MasterCard stock shares also declined by more than 10 percent. Discover Financial Services fell 3 percent in the stock market.