During the Tuesday episode of Mad Money, host Jim Cramer discussed the major credit card networks as he noted that consumer spending remains resilient.
He began by highlighting the broader economic data and noted that roughly 81% of Americans hold a credit card, averaging three to four cards per consumer, with cardholders using about 29% to 30% of their available balance
Even though the median household holds approximately $8,000 in cash, consumers continue to prefer credit over drawing down savings. Explaining how these consumer habits feed into the major card networks, Cramer noted: All this is to say that the three big credit card companies, Visa, Mastercard, and American Express have a tremendous read on the state of the economy, and after a very rocky first quarter, these stocks have been steadily chugging higher since April. Examining the daily chart of market leader Visa Inc. (NYSE:V) with the help of Bob Lang’s (founder of Explosive Options) analysis, Cramer highlighted how the stock’s recent technical breakout contradicts theories of a struggling consumer: Why don’t we start with Visa?
That’s the most used credit card. 60% of cardholders have one… Check out the daily chart. Visa’s been roaring higher on terrific relative strength lately.