Rising consumer spending, fueled by continuing government stimulus and improving macroeconomic conditions, is helping the credit card industry recover from pandemic-led damages. The growing need for convenience, and increasing adoption of digital transactions, will likely benefit prominent credit card companies Visa (V), Mastercard (MA), and Discover (DFS) in the coming months. So, we think these stocks could be good picks now. Read on.The consumer credit card industry has experienced a significant rebound this year, buoyed by improvements in macroeconomic factors, the easing of pandemic restrictions, and government stimulus spending. Because consumers are now more apt to spend, credit card companies have been investing heavily in digital marketing and enhanced digital payment facilities. Furthermore, the pandemic has boosted the growth of companies in the digital payment space, thanks to remote lifestyles and social distancing mandates.
As an improving market and government stimulus boosts consumer spending, credit card companies will likely benefit significantly. The rising need for consumer credit, accelerating technological innovation, and widespread use of digital prepaid card services should drive the growth of the credit card industry in the coming months. Actually, the global credit card industry is expected to reach $103.06 billion in 2021, growing at a 3% CAGR.
Hence, we think major credit card companies Visa Inc . (NYSE:V), Mastercard Incorporated (NYSE:MA), and Discover Financial Services (NYSE:DFS) are well-positioned to capitalize on the industry’s tailwinds. So, these stocks could be solid additions to one’s portfolio now.