Friday, August 27, 2010
Credit Card Issuers Scramble for Profits
Faced with a raft of new regulations and customers who are spending less on their cards, executives at the nation's biggest issuers of plastic such as JPMorgan Chase & Co. and Citigroup Inc. are bracing for a less profitable future, the Wall Street Journal reported today. Card companies are struggling to recover from $1 billion in losses racked up last year as a result of the financial crisis. Auriemma Consulting Group, a New York firm that specializes in the payments industry, estimates that card companies could earn about $4 billion this year. That is less than a quarter of the record $18 billion earned in both 2006 and 2007, according to Auriemma, which does not include financial results from American Express Co. or Discover Financial Services Inc.