American Express announced an increase in its loss reserves for bad consumer debt again this quarter as consumers are expected to continue defaulting on credit cards after troubles in the mortgage markets, higher energy costs, and higher food bills. Meanwhile, many are expecting the housing market to continue stalling until 2010 when the resets start to slow.

From BBC News:

American Express has posted a 10% drop in profits for the three months to December after it set aside extra capital to cover bad credit card loans. The US credit card firm said net income was $831m (£418.7m), down from $922m a year earlier. It attributed the decline to an after tax charge of $274m to boost revenue for credit card-related losses. This reflected huge defaults by American Express customers suffering from higher mortgage repayments and higher energy and food bills, analysts said.