Quarterly results from Capital One Financial, one of the largest card issuers in the US and the UK, showed a $1.4bn fourth-quarter loss as borrowers struggle to repay debt.
The news came as it emerged the Capital One's UK operation is to axe direct mail for customer acquisition and terminate its multi-million pound contract with database services supplier Acxiom (brandrepublic.com/marketingdirect, Friday 23 January).
The company has set aside another $1 billion to cover higher charge-offs this year.
Capital One's stock price fell 12% to close at $19.32 on Friday, its lowest level in a decade.
Despite the fact that Capital One is said to have avoided the packaged securities of sub-prime loans and therefore huge losses, its share price has dropped 60% since March 2008 when it stood at over $50.
Credit-card companies are being hit by falling house prices, the financial crisis and surging unemployment mean some customers cannot pay back debt on their cards.
"From a credit perspective, 2009 is literally and figuratively a write-off," one analyst noted on Friday. "We view the entire industry embarking on a path of permanently lower equity returns."
However analysts say Capital One has a strong balance sheet, compared with many of its weaker competitors.
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