Economics
Where’s That Cheap Oil Windfall?
Lower petroleum prices have yet to provide the expected boost
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During a July 24 earnings call, Visa Chief Financial Officer Vasant Prabhu said gasoline prices have had a “significant negative impact” on business. MasterCard says cheaper gas took 2 percentage points off the growth in the value of its overall second-quarter transactions.
When the price of crude oil started dropping a year ago, credit card companies were thought to be among the winners. Consumers and businesses would soon be buying ever-cheaper gasoline made with ever-cheaper crude. The effect would be like a tax cut. The Department of Energy calculated in April that the average U.S. household would save about $700 on gasoline this year compared with 2014. Visa and MasterCard figured consumers would eventually spend that extra cash.