BOSTON — The worst isn't over for credit-card companies, said Chris McWilton, president of U.S. markets at MasterCard Inc.

"Our customers are under a significant amount of stress [with] very high levels of credit charge-offs," said McWilton, speaking Thursday at a Keefe, Bruyette & Woods Diversified Financial Services Conference in New York. His comments were monitored via the Internet. "Unemployment hasn't peaked. It still has ways to go. Credit losses aren't all behind our customers."

The U.S. unemployment rate was 8.9% in April, its highest level since September 1983. Economists predict the joblessness rate will hit 10% or higher.

Unlike credit card-issuers, such as JPMorgan Chase & Co., American Express Co., Citigroup Inc. and Bank of America Corp., MasterCard and larger rival Visa Inc. don't lend to consumers. This makes the two companies less vulnerable to credit woes stemming from delinquencies and souring credit-card loans. MasterCard and Visa make money from the fees they charge banks to process card payments.

To cope with rising delinquencies on credit-card loans, issuers of plastic are scaling back marketing and are reducing efforts to acquire new users, said McWilton. Instead, companies are intensifying efforts to work through credit losses and to better manage their card-loan portfolios, he said.

McWilton also addressed the impact of the sweeping credit-card legislation passed last month that restricts the ability of companies to raise borrowers' interest rates and charge many of the card fees.

"Like any legislation passed under anger or popular sentiment, it went too far," said McWilton.

The impact of this legislation on the U.S. card-payments business "cannot be underestimated," he said. "It will radically impact profit pools [of credit-card issuers] at a time when they are dealing with staggering credit losses."

But issuers of plastic will find ways to recoup lost revenue, he added. For instance, companies could start charging a fee for paper statements, McWilton said.

On the upside, McWilton said signs of an economic recovery were emerging. Retail-spending trends, while still sluggish, indicate that the sharp declines seen in January and February are abating.

"The U.S. is coming out of difficult times," said McWilton.

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