Mastercard Moves Lower

Forbes Article by BetterTrades

03-05-09 06:50 PM EST

MasterCard Moves Lower

You still have time to get short on the card for everything else.

For far too long, Americans have been living on cheap credit, buying goods and services that stretched budgets to the max. Low interest rates and available credit led to some disastrous results, as the global economy is finding out.

BetterTrades delves into the world of credit card processors. The expansion of debt that Americans ran up heading into the credit and housing meltdown has put the issue of credit cards front and center. The benefits of credit cards, providing ease of transaction and affording another layer of liquidity, have become a ticking time bomb.

Rate hikes by card issuers has raised the ire of Congress, specifically Senate Banking Committee Chairman Christopher Dodd. Congress has made it a point to warn credit card companies that their practices of hiking rates on unsuspecting clients is about to end.

Card processors are also in the precarious position of benefiting from increased use of cards as consumers lack liquid assets like cash while suffering from a newfound savings initiative. With unemployment and global economies languishing, it seems like most financial companies will be hit with hard times.

Along with MasterCard, we charge up some analysis on Visa and American Express. Bearish technicals coupled with pending oversight from Washington are signaling bad news for the entire electronic payment network.