The fall out of the stock market has primarily been felt in the real estate and mortgage industries over the past few months. The stock market has recovered slightly after the major decline in mid January. The industry that is facing the most scrutiny in today's market is the credit card industry. A major factor that will determine the fate of this industry is the new restrictions banks have passed regarding loan underwriting and criteria. In many years past if a home owner was burdened with credit card debt they were able to obtain a home equity loan or second mortgage to pay this debt off. In today's market this alternative is going to be very difficult, most lenders have eliminated offering home equity loans and combined with home values declining this is a recipe for disaster. When you combine this with a steep economic slow down, the loss of jobs and rising fuel prices many financial experts  are predicting that credit card companies will face billions in potential losses in 2008. The fed reducing the fed funds rate may help slightly, but the credit card industries will most likely tighten their guidelines in a move to try and prevent future losses.

 

 

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