The White House Issues a Major Warning: Why Investors in These 2 S&P 500 Stocks Shouldn't Worry.

Group 1: Proposed Credit Card Interest Cap - The Trump administration proposed a one-year cap on credit card interest at 10% to improve affordability for Americans, targeting the financial services sector [1][2] - Credit card interest rates typically range from 25% to 30%, with Americans holding over $1.2 trillion in credit card debt, making it a politically appealing issue [2] - If implemented, the cap could lead to reduced credit availability for all but the most creditworthy borrowers and may affect popular rewards and perks associated with credit cards [3] Group 2: Impact on Credit Card Issuers - A cap on interest rates would negatively impact credit card issuers like JPMorgan Chase and Capital One, which rely on revenue from consumers carrying revolving balances [2][4] - The proposal faces significant legislative hurdles and lacks bipartisan support, with strong lobbying from the banking industry to protect financial services interests [3] Group 3: Visa and Mastercard's Position - Visa and Mastercard do not lend money or approve borrowers, thus avoiding credit risk, which positions them favorably in the event of an interest cap [4] - A reduction in credit availability could lead to lower spending on credit cards, but the likelihood of the proposal becoming law is considered very low [4] - Both companies benefit from a powerful network effect, with their cards accepted at over 150 million merchant locations, enhancing their value to both merchants and cardholders [5] Group 4: Financial Performance - Visa and Mastercard reported impressive net profit margins of 54% and 47%, respectively, during the three-month period ending December 31 [6]