Credit card losses rising in worrying trend for U.S. economy, banks

Published 07/31/2017, 07:23 PM
© Reuters.  Credit card losses rising in worrying trend for U.S. economy, banks
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  • The average net charge-off rate for large U.S. card issuers rose to 3.29% in Q2, its highest level in four years and the fifth consecutive quarter of Y/Y increases, Fitch Ratings reports.
  • All eight of the largest issuers - JPMorgan Chase (NYSE:JPM), Citigroup (NYSE:C), CapitalOne (NYSE:COF), Discover (NYSE:DFS), U.S. Bank (NYSE:USB), Wells Fargo (NYSE:WFC), Bank of America (NYSE:BAC) and American Express (NYSE:AXP) - saw increases for the quarter.
  • “The overall environment is deteriorating,” DFS CEO David Nelms tells WSJ, noting the new string of losses in the industry after 24 quarters of declines.
  • The trend of losses is occurring even amid near-record lows in U.S. unemployment, raising fears that credit performance could quickly weaken if the jobs situation weakens.
  • “We’ve seen an inflection point in credit,” says Charles Peabody, managing director at Compass Point Research & Trading. “It is going to get worse from here."
  • Now read: Bank Of America: An Often-Overlooked Reason For Owning The Shares

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