The credit services industry suffered because of the near-zero interest rate environment and lower consumer spending amid the pandemic. However, the sector has witnessed a solid recovery from increased credit transactions. Also, the Federal Reserve approved a 0.25 percentage point rate hike, the first increase in more than three years. Moreover, the possibility of aggressive interest rate hikes to control multi-decade high inflation should help the credit services companies generate solid revenues. Therefore, both Visa Inc. (V) and American Express Company (AXP) should benefit.
V facilitates digital payments among consumers, merchants, financial institutions, businesses, strategic partners, and government entities. It operates VisaNet, a transaction processing network. AXP provides charge and credit card products and travel-related services worldwide. It operates through three segments: Global Consumer Services Group; Global Commercial Services; and Global Merchant and Network Services.
