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The increasing number of defaults by customers forced American Express (AXP) to take a fourth-quarter charge of $275 million.

Write-offs for the fourth-quarter increased to 4.3 percent, up from the 3.7 percent in the third quarter. This year doesn't look good for the company either, as the company projects write-offs will grow to 5.1 percent to 5.3 percent for 2008. Write-offs are loans a company considers uncollectable.

In a conference call today, American Express Chief Financial Officer Daniel Henry stated that the rate of loans to be repaid in December got far worse than expected. Other companies have reported a similar experience as well. Henry did add that their experience was with U.S. consumers, and not corporations or international customers.

"We did see some negative credit trends among U.S. consumers during December, particularly in California, Florida and other parts of the country most affected by the housing downturn," said Chief Executive Officer Kenneth Chenault.

It is expected that industry-wide, the trend in paying back credit cards will continue on into 2008, and probably worsen before it starts to level off.

The company also gave guidance on its first-quarter earnings, and they will fall below the expected 93 cents analysts expected, finishing at less than 90 cents a share.

Before taxes, the charge will be somewhere around $440 million for the fourth-quarter, according to the company. Earnings will be reported on January 28.