NEW YORK, Nov 11 (Reuters) - Profits at U.S. credit card issuers will remain challenged over the near term amid high unemployment, bankruptcies and losses, Fitch Ratings said on Wednesday.

Rating outlooks remain negative on less diversified credit card issuers, such as American Express Co (AXP.N: Quote, Profile, Research), Capital One Financial Corp (COF.N: Quote, Profile, Research) and Discover Financial Services (DFS.N: Quote, Profile, Research), Fitch said in a report. A negative rating outlook indicates a company is at risk of a downgrade over the next one to two years.

Customers' purchase volumes, important to credit card issuers' revenue, were relatively flat in the third quarter but were down 13.7 percent annually at the top six card issuers, Fitch said.

Credit card loss rates moderated and early-stage delinquencies fell from second-quarter peak levels, but Fitch said it expects higher loss rates into 2010.

The U.S. unemployment rate, which jumped 40 basis points to 10.2 percent in October, is expected to remain above 10 percent through 2010, which does not bode well for credit card performance, Fitch said. Charge-offs on Fitch's prime credit card index generally trend in line with the unemployment rate.

Prime credit card delinquencies of 60 days or more rose 16 basis points in October to 4.22 percent, up 104 basis points from a year earlier, Fitch said.

The agency said it is assessing the long-term impact of the Credit Card Accountability, Responsibility and Disclosure Act signed into law in May, which could have a significant impact on credit card company's profits.

Meant to protect consumers from sudden rate hikes, hidden fees and other deceptive practices, the act prevents companies from raising rates on existing card balances and requires companies to keep promotional rates in effect for at least six months, among other restrictions.

"The card act is significant, as inability to re-price existing balances will necessitate higher rates for all cardholders, and credit availability is expected to decline materially as card issuers tighten underwriting criteria and reduce credit lines," Fitch said.

The longer-term impact on profits will depend largely on competitive reactions to the legislation, Fitch said. (Reporting by Dena Aubin; Editing by Leslie Adler)