A quick look at the fundamentals shows this company currently trades at 12.05x forward earnings, price to book value of 3.29 and projected EPS growth next year of about 5%. Also important to mention is the high debt to equity ratio of 3.58. This is a scarily high number and looking at the total debt over 5 years, there has been little to show that management is concerned with paying down this debt. Rates may be low for some time but even at low rates of interest the company is still throwing money out the window in interest payments.

Next Discover Card Financial Services (DFS).

Fundamentals for discover card are slightly more promising that AXP's with a forward P/E ratio of 8.79 and debt to equity ratio of 2.4. DFS trades slightly below twice book value at 1.92. The company also has cash on hand, about 6.91 per share. This should help the company lower its debt and secure the financial stability of the company.

MasterCard.

The #2 company in regards to market share, the company exhibits some extreme fundamental data. MA trades currently about 2 times the P/E ratios of the previous two companies. Its earnings multiple is 16.65 yet this is justified by the company's 18% growth in EPS expected next year and over the next five years. The company has no debt which enhances the company's financial stability and has an outstanding $28 per share of cash on hand. This cash on hand is equivalent to 8% of the stock price. This leads me to believe the company may be planning a significant share buyback and/or may increase its current dividend or announce a special dividend. On the negative side, the company trades 8 times book value which is a very large over-pricing, which may cause some selling pressure moving forward.

Visa .

Visa is the #1 company in regards to market share and currently trades at 15.91 times forward earnings and also has no debt to payoff. Visa also has its high P/E ratio justified by a growth rate next year of 15% and a 5 year growth rate of 18%. Visa has about 4.68 per share of cash on hand which it may use to continue its ongoing share buyback plans.

Intangibles

AXP is one of the few cards that still charges its users to have the card and the rates are not cheap. Of recent, the company has focused on promoting its brand by waiving the annual fee which should help spur growth, but the key to the company's success will be whether or not it can hold on to those customers to generate the fee revenue.

DFS is more than a credit card company, it is a financial services company. Over 70% of all credit card users have stated that they use the company's website to pay bills or monitor their statements. Through this usage, Discover is able to promote its financial services business such as online banking and CDs. This area may offer DFS a growth opportunity that isn't available through the other card companies.

What went into my decision:

1. Visa has the largest circulation of credit and debit cards by almost double its next competitor, MasterCard. It has global growth potential that is already being implemented and it's in the process of reaching untapped markets and catering to unique curcumstances around the world, such as in India, where debit cards, not credit cards, are the primary medium for payment.

2. MasterCard has the ability (and has already begun) to expand overseas but will really need to break through in a big way since Visa already has a 2:1 advantage in cards issued. Apply for Credit cards with best deals and offers

3. Discover Card has great growth potential horizontally with its online banking division, however, vertically I see growth in the credit card industry to be tough at best.

4. American Express won't have much of a future if it doesn't pay down the debt and alter its business model. With the changing economic times, so must American Express change its business model to phase out annual fee cards. When it comes time for businesses, especially small businesses, to cut costs and find savings wherever they can, finding an alternative to American Express will be a no brainer.