Capital One warns on troubled loans

Credit card giant Capital One Financial Corp. said Tuesday that it could record several hundred million dollars more in charge-offs in 2008 than previously forecast because of persistent loan delinquencies and the troubled housing market.

The company’s shares ended down $1.06 at $59.47 after sinking to $58.05 earlier in the day, the lowest price in nearly four years.

The McLean, Va.-based company, a credit card issuer that is expanding into retail banking, said last month that it expected to see $1.2 billion in charge-offs in the fourth quarter and $4.9 billion in 2008. The losses were based on the delinquency trends in Capital One’s loan portfolio.

In a filing Tuesday with the Securities and Exchange Commission, the company said it now expected the charge-off amount for 2008 to range from $4.9 billion to as much as the mid-$5 billions.

The company said one factor affecting credit card payments was some consumers’ inability to tap their home equity as they had in the past.

Sinking home prices are clipping or wiping out some homeowners’ equity. That wealth had been tapped by many Americans in recent years to pay off debts or support their spending.