The past quarter-century was fun for American consumers. But after all that borrowing and spending, they’ve rediscovered thrift and prudence. This is good news for personal balance sheets but bad news for credit card
companies.
Fitch Ratings recently forecast that earnings of U.S. credit card issuers will continue suffering because of the lousy labor market, bankruptcies and bad loans.
The report, summarized here by Zacks Equity Research, details how the major credit card issuers were dealing with losses as the nation’s unemployment rate hurdled above 10%. ”Also, as it is expected that the (unemployment) rate will remain above 10% through 2010 (and that) consumers will increasingly fall behind on payments,” Zacks said. “As a result, the losses of the credit card issuers could worsen further.”
This was copied from MSN Money
