Right in time for the holiday shopping season, A.G. Edwards & Sons analyst Joel J. Houck downgraded the credit card company MBNA Corp. to "reduce" from "maintain," citing concerns about earnings and credit losses.

Shares of MBNA, which have been unsteady for weeks, took a particularly hard hit on Monday following the late Friday downgrade. Other consumer finance companies were also swept up in the decline, with Providian Financial down $6, or 6.75%, to $82.875, and Capital One, down $2.9375, or 5.6%, to $49.5625. MBNA lost $2.5625, or 7.03%, to $33.875. American Banker's index of 225 banks dropped 2.2% and its index of the top 50 banks 1.84%.

"We recommend investors reduce their exposure to MBNA," Mr. Houck wrote in his research report. "Our fundamental concerns are a combination of MBNA's business model, which we believe is not well suited for sluggish economic conditions, and our expectation for a continued slowdown in the economy."

Mr. Houck wrote that he is concerned about increases in consumer debt and personal bankruptcies. Second-quarter nonbusiness filings for bankruptcy protection totaled 312,486, up 3.9% the first quarter, according to the American Bankruptcy Institute in Alexandria, Va.

Card delinquencies declined, though, according to the American Bankers Association. It reported Sept. 21 that 2.99% of credit card bills were paid late in the second quarter, versus 3.28% in the first. On a dollar basis the change was from 3.94% to 3.88%, the ABA said.

Mr. Houck rated Providian and American Express Co. with a lukewarm "maintain," and Capital One with an "accumulate." He said that "in a sluggish economic environment, even a recession, Capital One's fundamentals are likely to hold up reasonably well, but MBNA's fundamentals are likely to deteriorate."

Kathy Shanley, a fixed-income analyst at Gimme Credit Publications Inc., wrote in a research note published Monday that Providian's business model "hasn't been tested in a downturn" either. Her firm views Providian as "a strong double B" and advises investors to "continue to avoid this credit," she wrote.

She said she favors MBNA over Providian and Capital One, because MBNA focuses on prime-type consumers.

Analysts have been generally positive about the group, and on First Call/Thomson Financial's scale (in which 1 equals "strong buy" and 5 "sell") Providian ranks 1.4, Capital One 1.5, and MBNA 1.9.

David S. Berry, director of research at Keefe, Bruyette & Woods Inc., who has "buy" ratings on Capital One and Providian, and an "outperform" on MBNA, wrote in a Nov. 1 report that card companies can add to earnings in a slow economic environment by increasing managed receivables or the return on managed receivables. He said that history does not indicate that card stocks perform badly when writeoffs increase.

Francois Trahan, a sector strategist at Brown Brothers Harriman & Co., gave the group an "overweight" recommendation in a note on Monday.

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