November 2008 Archives

The current state of the economy may worry credit card issuers, but MasterCard and Visa seem to be completely isolated from all those bad news. Both companies don't actually issue cards so they don't have to worry about consumers defaulting. Should some people stop using credit cards, MC&V would still make plenty of money thanks to the ever-growing debit card market. In fact, despite a recent $500 million anti-trust settlement, MasterCard shares shot up by nearly 10 percent yesterday.

Until recently, many economists predicted that by early next year the economy would turn a corner and start to recover. However, this is no longer the case as some fear that the worst is yet to come. So far, credit card issuers have not experienced a meltdown, but delinquencies have been rising steadily and may reach record highs next year. Some issuers expect record losses in 2009. Thanks to the $700 billion bailout we probably won't see any large credit companies fold. Let's hope for the best.

WSJ