Six of the largest US credit, debit, and charge card issuers have reported 4th quarter 2008 financial results this month.

Included in their results are some steep drops in the purchase volume on the cards they issue -

• 6% at US Bank
• 7.6% at JP Morgan Chase
• 10% at American Express
• 10%+ at CapitalOne
• 15% at Bank of America
• 17.2% at Citigroup

Between them, three own around 70% of the Visa-branded credit cards issued in the US, according to a Reuters report 2 weeks ago.  More details …

Links to the specific reports of -

US Bank has reported details that debit card transaction dollar volume was essentially unchanged in the 4th-quarter compared to the same quarter in 2007, but was actually down sequentially from the 2nd and 3rd quarter of 2008. For credit cards, purchase volume was also lower than in both the 2nd and 3rd quarters of 2008. In the bank’s merchant acquiring business (Elavon), the number of transactions processed increased about 3.5% over the prior year, while the purchase volume declined about 6% (= more but smaller purchases).

JP Morgan Chase (pdf file), who reported 4th-quarter 2008 net income of $702 million, compared with net income of $3.0 billion in the 4th-quarter of 2007. In its cards business, the net loss was $371 million, a decline of $980 million from the prior year, due primarily to increased provision for credit losses. Charge volume was up only 1% year over year. The net charge-off rate grew to 5.29%, up from 3.89% last year.

American Express announced overall Amex cardholder spending declined 10% year over year (5% when adjusted for foreign exchange rates). In the US, card billed business (including cash advances) declined 8% year over year, falling from $123 billion to $112.7 billion in the 4th-quarter of 2008. In terms of average cardholder spending declined 15% to $2,792 for the quarter. The average merchant discount rate remained essentially unchanged at 2.53%.

Capital One (pdf document) has reported US Card business purchase volume in the 4th quarter declined over 10% against Q4-2007, and was down 5% from the 3rd quarter of 2008.  Charge-offs on the US Card business increased from 4.84% to 7.08% between Q4-2007 and Q4-2008.

Bank of America with a net loss of $1.79 billion in the 4th-quarter compared with net income of $268 million a year earlier.

Citigroup reported a net loss for the 2008 4th-quarter of $8.29 billion. Citi said revenues in its Global Cards business fell 27 percent. In its North American cards business, purchases on Citi-issued cards declined 15%. In EMEA, purchases declined 21%, in Latin America purchases declined 15% while in Asia purchases declined 7%.

CapitalOne’s results in particular drew flak on the bloggosphere – Barron’s Capital One’s Pernicious Plans Don’t Pan Out gave them a particularly nasty gumming, while SeekingAlpha presented the full Capital One Financial Corp. Q4 2008 Earnings Call Transcript running into a double-digits number of blog article pages.

Additional worries for the credit card industry come from the latest credit card payment rate report, reported by USA Today, showing that customers are cutting back on the repayment amounts they direct at their cards – reducing revolving credit usage and treating existing balances as term loans to be repaid over extended periods.  November 2008 say a significant drop in the payment rate metric used by the industry as an indicator of consumer financial health.

Ed