Best way to short credit card companies?

Question

I'm thinking this might be the other shoe to drop... any suggestions for companies with the most exposure to defaults on cards?

Answer 1

That's not how credit cards work. Credit cards get money from the money markets and then pay the money markets back. It's all gain and no pain from them.

You could go after mortage companies and construction though if you want to go after the credit crunch.
http://www2.barchart.com/sectors.asp?sec=mortgage~investment.sec&level=2&title=Mortgage+Investment

http://www2.barchart.com/sectors.asp?sec=residential~construction.sec&level=2&title=Residential+Construction

Answer 2

interesting idea -- i saw that article, too.

:-)


i'd guess you'd want the companies that take the riskier card holders and who have the most exposure per dollar of capital.

that probably lets out many of the full line banks

what personal finance companies are big in credit cards and esp. cards to highly loaned up customers?



GL

Answer 3

ummm... buy puts on MasterCard .. symbol MA.... they are very dependant on credit cards... seeing as how they are one.

American Express symbol AXP is another one... but i'd probably avoid shorting them as they tend to have much better credit/lending standards for who they give cards to.