Fitch Ratings: U.S. Credit Card Asset Quality to Weaken in 2008.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. said today that the U.S. credit card industry has been a highly competitive and profitable market in recent years as issuers have benefited from a relatively benign credit environment, low interest rates, and growing interchange revenues, coupled with the immense popularity of card rewards. This being said, the 2007 mortgage market crisis has many investors wondering what challenges the credit card industry will experience in 2008. While Fitch believes deteriorating consumer credit trends will continue throughout this year, changes in bankruptcy legislation and industry dynamics raise questions about what 'normalized' delinquency and charge-off levels are for credit cards. In this Fitch Special Report released today, 'Credit Cards: Asset Quality Update', Fitch discusses current asset quality trends in the credit card market; and provides updated growth and asset quality statistics for some of the largest credit card issuers. Fitch's Outlook for consumer finance is Negative for 2008 and Fitch expects credit card performance will noticeably deteriorate de·te·ri·o·rate v. 1. To grow worse in function or condition. 2. To weaken or disintegrate. during the year, given spillover spill·o·ver n. 1. The act or an instance of spilling over. 2. An amount or quantity spilled over. 3. A side effect arising from or as if from an unpredicted source: from residential mortgage, weaker economic trends, and higher levels of unemployment. Moreover, credit card asset quality deterioration de·te·ri·o·ra·tion n. The process or condition of becoming worse. beyond Fitch's expectations could be a driver of negative rating action in 2008 for mono-line credit card issuers. However, many of the largest credit card issuers benefit from business line diversity and thus weakness in credit cards, by itself, is unlikely to be a rating issue. The Fitch Special Report, 'Credit Cards: Asset Quality Update,' is available on the Fitch Ratings web site at www.fitchratings.com. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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