* Q4 rev up 20 pct

* Incurred $495 mln after-tax charge related to litigations

* Shares rise 7 pct

By Tanya Agrawal

Feb 2 (Reuters) - A litigation-related charge took a large bite out of MasterCard Inc's quarterly earnings, but the payment processor beat analysts' estimates for the seventh straight quarter, as consumers around the world used their cards more.

The world's second-largest credit and debit card processing network said it incurred a $495 million after-tax charge related to merchant litigations in the United States over the fees they pay on credit card transactions.

The company, however, doesn't expect to see any significant or long-term impact on its interchange fees with regard to the settlement with merchants, Chief Executive Ajay Banga said on a post earnings conference call.

Retailers -- including D'Agostino Supermarkets Inc and Payless ShoeSource -- allege that companies like MasterCard, Visa and others violate anti-trust regulations by fixing the stores' fees for processing their payment cards.

The lawsuit alleges that rules preventing stores from offering customers discounts for paying in cash or steering them toward less costly forms of payment, such as cash or competitors' cards, are costing merchants an estimated $50 billion each year.

Analysts, however, are not overly perturbed by this litigation charge.

"The litigation charge was lower than expected and even if the charge increases, the company has $4.9 billion in cash, so it would be manageable," Evercore analyst David Togut told Reuters.

Continuing economic uncertainty in Europe has led to a decline in consumer sentiment in the region, MasterCard said. However, it continues to see growth in the northern and eastern parts of Europe.

"We could see a slowdown in Europe as far as the company is concerned, but it wouldn't affect them materially as we are seeing an increasing shift in payment mode from cash to electronic," Guggenheim Securities analyst David Darst told Reuters.

The company forecast a net revenue growth of 12 to 14 percent on a constant currency basis for 2011 to 2013 and said any negative impact from the litigation settlement is included in its forecast.

STRONG EARNINGS

For the fourth quarter, the company which competes with Visa and American Express, posted a net income of $19 million, or 15 cents a share, compared with $415 million or $3.16 a share last year.

Total revenue was $1.72 billion, up 20 percent.

Excluding items, the company posted a net income of $514 million, or $4.03 a share.

Analysts had expected the company to earn $3.91 a share on revenue of $1.72 billion, according to Thomson Reuters I/B/E/S.

Cross-border transcation volume for the fourth quarter rose 17.5 percent, while processed transactions grew 23 percent to 7.7. billion.

Excluding the charge, operating expense grew 11.5 percent to $968 million, from the previous year.

Earlier in the month, American Express posted a higher quarterly profit on higher cardholder spending and a slower growth in expenses, and set aside more money to cover bad loans. Visa is expected to report fourth quarter results next week.

Shares of the Purchase, New York-based company were up 6 percent at $379.20 in late morning trade on Thursday on the New York Stock Exchange.

• A Permanent Economic Emergency