Credit-card issuers ranging from American Express Co. to Capital One Financial Corp. to Citigroup Inc. will likely face stiff headwinds in the second half of this year. Analysts expect this credit storm to peak at the end of 2008, though it could possibly last through the early part of next year. Companies are grappling with a weak economy and a possibly higher unemployment rate. “Clearly, the credit-card cycle is turning for the worse because the economic cycle is turning for the worse,” says David Hendler, an analyst at CreditSights Inc. The recent slew of second-quarter results from the major credit-card issuers already signals deeper loss reserves and higher defaults. For instance, the credit-card arm of Bank of America Corp. — the third largest issuer in 2007 by credit card volume, according to the Nilson Report –...
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