The New York Times has more on the Spiegel bankruptcy, citing a default rate of 17 - 20% among its credit card customers:

According to David Robertson, publisher of The Nilson Report, a trade journal that reports on the credit card industry, Spiegel had become, in effect, a subprime lender, offering credit to lower-income consumers who, in many cases, would not qualify for the more mainstream Visa or MasterCard...

When the economy started worsening, Visa and MasterCard started loosening their previously extremely tight standards across the country, Mr. Robertson said, ``casting a wider and wider net for customers.'' The retail companies, trying to compete for a share of the lucrative plastic business, had to lower their own standards even further.

As I said, leave the credit card business to Visa and Master Card. If the retail business is broken, looking for profits elsewhere is just postponing the inevitable day of reckoning.