Credit card transactions are on the rise due to increased discretionary spending ahead of the upcoming holiday season. So, credit card giants Mastercard (MA) and American Express (AXP) should benefit. But which of these stocks is a better buy now? Read more to find out.Mastercard Incorporated (NYSE:MA) provides transaction processing and other payment-related products and services. It facilitates the processing of payment transactions, including authorization, clearing, and settlement. In comparison, American Express Company (NYSE:AXP) provides charge and credit payment 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.
The use of credit cards and other digital payment methods has increased significantly amid remote lifestyles. With rapid vaccination and recovering consumer confidence, spending on services and discretionary items has increased considerably. According to The Conference Board, the consumer confidence index increased in October, following declines over the previous three months. And according to the Commerce Department, overall consumer spending rose 0.6% in September.
The rapid adoption of digital prepaid card services should further drive the credit card market’s growth in the coming months. According to Research and Markets, the global credit card market is expected to grow at a 3% CAGR to hit $103.06 billion in 2021.