American Express warns on 2008

American Express Co. expects slower spending and more missed payments on credit card bills to hamper its profit throughout 2008, the company said Thursday.

While rich people are still doing fine, American Express said the slumping housing market has begun to take its toll on the American consumer. Charges on the company's roughly 84.7 million cards began to tail off in December, American Express said, and more clients failed to repay their debts.

The company plans to reserve $440 million for the fourth quarter, preparing for loans that are currently overdue.

American Express believes it earned 70 cents per share to 72 cents per share in the fourth quarter, which represents a decline from the fourth quarter of 2006.

The company expects profit growth of 4 percent to 6 percent this year, while analysts polled by Thomson Financial forecast profit growth of 8 percent.

Consumers in the U.S. have felt the most pressure in California and Florida and other areas of the country hit hardest by the housing slump, American Express said.

Late Wednesday night, Capital One Financial Corp., a credit card lender based in McLean, Va., set aside $650 million to prepare for unpaid credit card bills.