Credit cards are to become the next victim of the financial crisis as consumers default on their repayments, according to Innovest Strategic Value Advisors.

In a recent report, the firm said the difficulties in the mortgage markets are symptomatic of a deeper problem that stems from consumer reliance on debt, the Register-Guard reports.

"For nearly a decade, Americans have been taking on more debt while their savings and real wages have declined. Mortgages were the first victim of this credit deterioration. We believe credit cards will be next," the document read.

Innovest predicts that credit card providers will be forced to write off $41 billion worth of bad debts this year, followed by a further $96 billion in 2009.

Meanwhile, it has been reported that banks and consumer groups are urging the government to make it financially feasible for them to forgive up to 40 per cent of the debt owed by some credit card customers.

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