Credit cards sell off after rate decision

CHARLOTTE, N.C. - Shares of major credit card companies sold off slightly Wednesday after the Federal Reserve lowered its key interest rate by a half point to 1 percent.

The cut, which was the second half-point reduction in the funds rate this month, puts additional downward pressure on consumers' monthly credit card bills. As a result, many cardholders could possibly see lower credit card rates.

MasterCard shares traded as high as $143.72 earlier in the session, but gave up some of the gains after the Fed's announcement, recently trading at $139.19. Shares of Visa traded at $52.91, slightly off their intraday high of $53.37.

Earlier this week, the two companies agreed to pay Discover up to $2.75 billion to settle an antitrust suit. Under terms of the agreement, Discover will receive $862.5 million from MasterCard in the fourth quarter, and $1.89 billion from Visa over the four quarters of 2009.

Discover shares fell 25 cents to $11.40.

Visa settled a similar suit with American Express nearly a year ago for a maximum of $2.25 billion, and MasterCard settled with AmEx in June for a maximum of $1.8 billion.

Shares of American Express lost 37 cents to $25.10, while another credit card issuer, Capital One, lost $1.47, or 3.7 percent, to $38.53.

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