Wall Street is lowering its revenue-growth forecasts for Visa Inc. and MasterCard Worldwide based on the sharp reduction in credit and debit card spending JPMorgan Chase & Co., Bank of America Corp. and Citibank Inc. reported last week. Analysts at Barclays Capital Inc. said in an equity research report today it expects Visa's revenue growth this year to increase only 7%, down from its previous estimate of 13%. It also expects MasterCard's revenue growth to increase only 5%, down from a previous forecast of 8%. The New York-based investment banking company says it is reducing both growth forecasts because of the economic downturn's effect on consumer spending. "The latest data from the top card issuers indicates consumers have pulled back significantly on spending," the analysts wrote, noting the extent of the contraction was "deeper than expected." Based on current trends, major card issuers' card-spending volumes could decline 10% this year, while "growth in debit, which is considered to be much less cyclical than credit, could slow to a trickle," the report notes. The Barclays analysts also wrote that they recently learned of a "significant" price change MasterCard plans to introduce at the end of April, which Visa likely will follow shortly afterward. The price change likely would cause an increase in MasterCard and Visa earnings per share, according to the report. Bruce Harting, lead analyst on the report, was not available to provide further details on MasterCard's price change, but observers note that card networks often introduce new merchant interchange rates in the first half of the year. U.S. Bancorp plans to announce its 2008 earnings tomorrow, followed by Capital One Financial Corp. on Thursday. Wells, Fargo & Co. plans to announce its 2008 earnings on Jan. 28. Visa is scheduled to release its 2008 results on Feb. 4, followed by MasterCard on Feb. 5.

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