Jon Quast

He does have incentive to see this.

Listen, he's actually publicly advocating for a 0% cap on credit cards going even further.

This would

in theory, benefit a company such as Klarna, which is why he's very excited about it.

You look at Buy Now, Pay Later, it's 0% interest over 12 months.

Some people are looking at this as, if we cap credit cards at 10% or 0%, that would push them more into competition with Buy Now, Pay Later.

But as Matt points out, it's not that simple.

You change the entire

financial structure of a credit card when you change the cap rates.

It impacts the credit card points slash miles and what they're offering.

They're going to drop certain customers because the profits just aren't there.

In fact, Wells Fargo analyst Mike Mayo points out that at the current proposal, it would wipe out one year of credit card profits.

That completely upsets the apple cart in this industry for sure.

in theory, push more people to a company like Klarna, which is why Sebastian Simakowski is so in favor of it and why I think that maybe we should watch companies in this space.

As a reminder, Klarna is more than just buy now, pay later.

It also has its fair financing service.

This allows for larger purchases, and it's more than four payment installments.

This is a little bit more towards the credit card territory as far as what people are buying.

So, yeah, maybe a proposal like this completely pushes people towards these companies like Klarna and more neobanks.

I'm looking at five below, ticker symbol FIVE.