The economic recovery and rising consumer spending and are driving the credit card industry’s growth. Therefore, credit card giants American Express (AXP) and Discover Financial (DFS) should benefit. But which of these stocks is a better buy now? Let’s find out.American Express Company (NYSE:AXP) and Discover Financial Services (NYSE:DFS) are well-known financial services companies that offer credit cards globally. AXP provides charge and credit payment card products and travel-related services to consumers and businesses worldwide. Its products and services also include merchant acquisition and processing, point-of-sale marketing, fraud prevention services, and the design and operation of customer loyalty programs. In comparison, DFS operates as a digital banking and payment services company worldwide. It issues credit cards, offers student and personal loans and savings products, and manages automated teller machine networks.
Rising consumer spending and economic recovery driving an increase in credit card transactions. Furthermore, an increasing preference for digital transactions is incentivizing credit card companies to collaborate with leading online platforms to expand their user bases. The global credit card market is expected to grow at a 1.1% CAGR to$107.69 billion by 2025. So, both AXP and DFS should benefit.
While AXP shares have gained 48.7% in price over the past year, DFS has surged 107.5%. DFS is a clear winner with 17.7% price gains versus AXP’s 7.4% returns in terms of their past six months’ performance too. But which of these stocks is a better pick now? Let’s find out.