What happened

"The markets are sending a message about coronavirus: The recession risk is real."  

So read one of the lead stories on The Washington Post this morning, and judging from the market's reaction to the latest novel coronavirus news -- the S&P 500 is down 6%, the Dow is down 6.4% -- investors are taking this warning to heart. There's a very real risk of a recession around the corner, and recessions aren't good for economies, for spending, or for credit card stocks.

Shares of Mastercard (NYSE:MA)Visa (NYSE:V), American Express (NYSE:AXP), Discover (NYSE:DFS), and Capital One Financial (NYSE:COF) -- basically, any stock that makes you think "credit cards" when you hear its name -- fell 8%-10% this morning. As of 1 p.m. EDT, Mastercard remains down 4.8%, and Visa an only slightly less worrisome 3.7%. American Express is off 7.8%, Discover is 9.7% lower, and Capital One -- traditionally the card that targets consumers with weaker credit scores -- is down a solid 10%.

This is not good news.

Hands holding scissors and cutting up an entire stack of credit cards

Image source: Getty Images.

So what

Most of the downward move can probably be chalked up to coronavirus concerns, of course. But here's a second aspect to the sell-off you might want to consider: Think of the last time you filled up your car with gas. How did you pay for that gasoline?

Chances are, you used a credit card. And the more expensive the gas was -- the more expensive a barrel of oil was -- at the time, the more money you charged to your card, and the more profit your credit card company made off of you.

Well, in case you haven't heard, the oil markets are falling apart today. Saudi Arabia just launched a price war against rival energy companies in Russia, lowering its price of crude oil by $6 a barrel in Asia, $7 a barrel in the U.S., and $8 per barrel in Europe. The price cuts mean cheaper oil for refiners that buy it, and cheaper gasoline for you.  

Now what

The bad news if you own bank stocks and credit card company stocks: Cheaper oil and the cheaper gasoline that comes from it almost certainly mean less revenue and profit for credit card companies in consequence.

Combined with less spending in general from folks cocooning at home and waiting for the coronavirus outbreak to ebb, less spending from workers locked out of their companies due to quarantine or simply lower consumer demand, less spending period -- and that right there gives you the reason why credit card company stocks are tanking today.