Americans love to “charge it”. This is why the darlings of plastic American Express Company (NYSE:AXP), Visa Inc. (NYSE:V), MasterCard Incorporated (NYSE:MA) have made solid investments in the past. In the U.S. credit card debt totaled $865.8 billion in 2009 but ticked down to $800.5 billion last year, thus for Visa, Amex, and MasterCard there is still plenty of money to be made thanks to our spending habits. However, not all credit card companies are created equal and despite Visa’s popularity, its been the worst performing stock of the three in the past 12 months.

Since last February Visa (V) has underperformed both American Express (AXP) and MasterCard (MA) to the tune of -9%, while MasterCard shares gained 14% and American Express increased 23%. If comparing stocks over a year period is to long for your in this volatile trading environment, Visa is still the loser when you look back six or even three months. Worse yet is when you compare Visa’s performance to the major indexes, the Dow Jones has jumped 22% since last year this time, and the S&P 500 is up 25%.

Americans are still charging with Visa, so what gives?

FINANCIAL REFORM – SHRINKING FEES

American Express, Visa, and MasterCard shares took a beating in December after the Fed proposed fees banks charge merchants for each transaction using debit cards could slash up to 90% of the revenue those fees generate. Under the proposal, merchants would be charged no more than 12 cents per debit-card transaction, a huge blow to Visa as the average interchange fees currently run from $1 to $1.30.

Thus, the credit card companies shares fell like faster than a Kardashian card credit scheme gone wrong. Excuse me? I digress, for those of your that missed this now defunct prepaid card opportunity of 2010, let me briefly remind you of some of the fees included:

- Card Purchase (Includes monthly fees for 6 months) $59.95

- Card Purchase (Includes monthly fees for 12 months) $99.95

- Monthly Fee (Applies after initial purchase period) $7.95

- Card Replacement – Primary or Companion $9.95

- ATM Withdrawal – Domestic $1.50

- ATM Inquiry or Decline – Domestic $1.00

The list continues at gawker.com, its beyond ludicrous

If only Visa could apply fees like a Kardashian card credit that could make up the difference for any future legislation that may impact their revenue potential. However, maintaining fees is just part of the problem, both Visa and MasterCard, only issue charge and credit card products but not debit cards, unlike the our winner American Express.

CREDIT CARDS ARE DYING

The U.S. credit card debt totals as noted earlier (which are on the decline) are an indicator that Americans with access to credit have been using their cards less and less. As Doug McIntyre said back in September:

Suppose that the consumer moves away from credit card use in large numbers. The result would be a drop-off in retail activity, at least during the transition from the use of credit cards to cash-based buying. Consumers may start to think twice about their shopping methods. A consumer who considers a purchase based on the ability to pay is a consumer who may decide that the purchase is not worth the risk of repayment at all. The retail industry could be changed forever.

COULD VISA COME BACK?

Thanks to the company’s earnings call this month, Visa has gained back some support from Wall Street when they affirmed expectations of 11% to 15% net revenue growth for fiscal 2011. During Visa’s fiscal quarter it bought back $1.1 billion of stock and have plans to buy another $694 million in authorized funds. They also will be paying a quarterly dividend of 15 cents per share on March 1st, to holders of record as of Feb. 11th.