The credit card sector is well positioned for handling any negative impact from the fallout of the Sept. 11 attacks, analysts noted last week, despite the fact that the events already have reduced credit card expenditures and delayed bill payments. Expectations of an economic downturn combined with the current rapidly declining interest rates mean excess spread levels for the majority of issuers are sufficient to weather the storm of a possible 6% percent-plus unemployment rates some are expecting.

Barclays Capital analyst Juliet Jones, who has been in touch with numerous issuers this past week, thinks established, prime players are in the position to perform well. In fact, she believes a 100 to 200 basis point increase in losses in a portfolio such as MBNA - although extreme - is sustainable.

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