Credit card meltdown hits banks.(Inside Track)

Next up for ailing mega-banks: a credit card meltdown. No surprise here, really; Americans have overused credit cards for years, trusting always in unending economic expansion and plentiful employment to guarantee their ability to service consumer debt.

All that, of course, has changed dramatically over the last year and a half, with millions of Americans suddenly out of work and trying to service huge, high-interest credit card debts with no income and no savings. Credit card defaults are soaring, and much worse is to come, according to the government's recently disclosed bank stress tests. By the end of 2010, says the government, America's 19 largest banks can expect to lose as much as $82.4 billion in credit card defaults.

2009 is widely expected to be the worst year in the history of the credit card industry. But that hasn't deterred Congress from seeking to impose tough new regulations on the sector, responding to pleas from hard-pressed credit card users who failed to read the fine print in their credit card agreements. With a hectoring President Obama demanding prompt legislation on credit card reform, Congress has now passed a bill with overwhelming bipartisan support in both houses and sent it to the president for his signature. Despite a measure legalizing firearms in national parks inserted at the last minute, President ...