Stimulus checks are starting to show up in peoples bank accounts today (via direct deposit) and will continue throughout the next quarter, which may do a few things.

1. People are likely to spend this money as mad money and then have the 'can't believe it's all gone' hangover afterwards. These people will just spend the cash, not pay down any debt (i.e. credit cards), and the Bush administration will be happy. This would actually have a negative affect on the bottom line of credit card companies because people are spending cash and not putting things on credit. However, most of this spending will ultimately be done via bank card with either a Visa or MCard logo at which point credit card companies still make some money off the purchase, albeit less than if they could tack on interest to an actual credit charge.

2. Some people, in spite of Bush administration not so subtle suggestions, will use the money to pay down debt, which most likely would be primarily credit card debt. This improves the bottom line of credit card companies and gives them a big influx of cash. Again, probably end up making less than if people bought things on credit, but ultimately the credit card companies want you to pay your bill so will be a good thing for them.

3. Some people will squirrel away the money into savings, retirement, investments, etc. and not insert this 'free' money into the economy whatsoever. This is the worst scenario for the Bush administration as it supposedly does nothing for the economy's current state. However, if I had a broker or investment manager, I would be expecting a call offering some great opportunity to add to my portolio or other investment vehicle. This ultimately turns into more commissions generated with investment firms and adds to the money brokers make, which will probably be spent out in the marketplace on a dinner, rolex, new suit, etc.

The way I see it this stimulus money is all good for the credit card companies and it is just a matter of how long before it physically pays off for them. I'm guessing higher than usual profits for the period ending Dec 31st, 2008 by Visa, MCard, Amex, Discover, etc.

Well as I read in another post on TK, the company and the stock are basically separate entities unto themselves and act differently. My opinion was originally a comment on another post asking about MA Puts, but it turned inot a blog post of it's own.

One thing I did not mention in my original post was that more banks seem to put the Visa logo on their debit cards than MC. Not sure how that plays out in all this, but the simple conclusion would be that Visa has more to gain from transaction fees than MC.

B of A has it's own troubles right now, so may have just been looking to raise some capital and release themselves from some other unknown committments?