Capital One sees credit card chargeoffs rising

NEW YORK (Reuters) - Capital One Financial Corp (COF.N), a large issuer of Visa and MasterCard branded credit cards, forecast on Tuesday that chargeoffs will keep going up, hurt by weakness in the housing market and more job losses.

Chief Executive Richard Fairbank estimated chargeoffs -- loans that the company does not expect to be repaid -- will remain elevated through 2010, sending Capital One shares down 1 percent.

"The job market is more frozen than in past recessions," Fairbank said at a financial services conference organized by Bank of America Merrill Lynch.

Most U.S. credit card companies reported credit card chargeoffs fell in September from record highs as consumers used tax refunds and other economic stimulus proceeds to lower debts, but late payments rose, suggesting more troubles ahead in an already battered industry.

Capital One credit card chargeoffs rose to 9.64 percent in the third quarter in the United States from 9.23 percent in the second quarter and 6.13 percent a year before.

Credit card chargeoffs usually track unemployment, which rose to an unexpected 26-year high of 10.2 percent in October, as the economy shed 190,000 jobs last month.

Capital One is the third-largest U.S. issuer of Visa branded credit card and the fifth-largest issuer of MasterCard branded credit cards. Its stock fell 1 percent to $39.38 in morning trading on the New York Stock Exchange.

(Reporting by Juan Lagorio, editing by Gerald E. McCormick)