While the credit services industry has been changing to conform to new government regulations, investors have been watching them closely.  Recent government regulations deeply restricts transaction fees charged by the payment networks.  Along with this, consumers seems to be borrowing considerably less than before.  Essentially, credit card companies had to develop new sources of revenue to offset the potential loses. 

If all these factors didn't seem damaging enough, the United States Justice Department also through their hands into the industry earlier this month.  In a lawsuit initiated by the Justice Department filed against Visa, MasterCard and American Express, these credit card giants were accused of violating antitrust laws.  MasterCard and Visa agreed to a settlement which allowed merchants to offer discounts to consumers who choose a credit or debit card which inflicts less transaction fees.  Many cardholders are unaware of these interchange fees and how they impact the cost of the goods or services purchased.  The Department of Justice accuses the three credit card processors of anti-competitive infringements by not allowing these discounts previously.

The Justice Department's suit did not include Capital One.  Capital One announced third quarter earnings of $803 million last week ($1.76 a share).  This can be compared with a net income of $394 million ($.87 a share) in the same period a year before.  The credit card company suggested the decrease in domestic credit card delinquencies to be the contributing factor in higher profits.