10 Best Credit Card Stocks to Buy Now

4. Bank Of America Corporation (NYSE:BAC)

Number of Hedge Fund Investors: 92

After years of hardship and the 2008 financial crisis, Bank Of America Corporation (NYSE:BAC) is currently the second-biggest commercial bank in the United States in terms of total assets.

The bank is among the top four credit card issuers and acquirers in the United States, has a strong commercial banking franchise, and is a Tier 1 investment bank.

The four main business segments of BAC are Global Banking, Global Markets, Global Wealth & Investment Management (GWIM), and Consumer Banking. BAC offers a wide range of banking and nonbank financial services and products while lowering the risk connected with market downturns by diversifying its business.

Bank of America Corporation (NYSE:BAC) reported higher-than-expected earnings for the second fiscal quarter of 2024, owing to excellent performance in its investment banking segment as well as solid net interest income. The share price increased by more than 5% YoY as a result of the earnings report, reaching a peak not seen since the start of FY 2022.

In Q2 2024, total credit and debit spending of $243 billion was 3% YoY. In terms of credit cards, the average outstanding loan totaled $99 billion, consistent with Q1 2024 and up from $94.4 billion YoY. The net charge-off ratio was 3.9%, up from 2.6% last year and 3.6% in Q1 2024. During Q2 2024, 72% of credit card sales were digitally enabled, a rise from 70% last year. Hence, digital channels have provided Bank of America with opportunities for ongoing expansion, particularly in the area of credit card spending.

ClearBridge Value Equity Strategy stated the following regarding Bank of America Corporation (NYSE:BAC) in its first quarter 2024 investor letter:

“We added several new positions during the quarter. Our largest new addition was Bank of America Corporation (NYSE:BAC), one of the world’s leading financial institutions, serving some 66 million consumer and small business clients across the U.S. as well as large corporations, financial institutions and governments globally. We believe that the interest rate pressure that Bank of America faced in early 2023 has subsided, and risks surrounding deposit outflows have abated, which should allow the company to improve its book value and capital growth as well as benefit from a rebound of capital markets activity.”

BAC is one of the Best Credit Card Stocks to Buy Now since it has promising growth potential. As seen by 19 analysts, BAC has a consensus Buy rating with an average price target of $42.39 and an upside potential of 5.61% from the current stock price.

Warren Buffett’s Berkshire Hathaway is the largest shareholder in the company, with 1,032,852,006 shares worth $41.08 billion.