Economic woes hit U.S. credit card business!
NEW YORK — Even as Washington Mutual Inc. lost billions of dollars from risky mortgages, the largest U.S. savings and loan could rely on its credit card business to turn a profit. No longer.
The thrift’s $175-million (U.S.) second-quarter loss from its card unit stemmed from higher delinquencies and an inability to sell some card debt to investors because of illiquid markets. It was Washington Mutual’s first card loss since it entered the business in 2005 when it bought Providian Financial Corp.
Washington Mutual is not alone. American Express Co., Bank of America Corp., Capital One Financial Corp., Citigroup Inc. and JPMorgan Chase & Co. face pressure as falling home prices, $4-a-gallon gas and rising food costs leave more cardholders struggling to pay their bills and force even wealthy customers