Credit Card Charge-Offs Hit The Highest Level In Nearly 7 Years And Credit Card Delinquencies Hit The Highest Level In Almost 8 Years
Credit Card Charge-Offs Hit The Highest Level In Nearly 7 Years And Credit Card Delinquencies Hit The Highest Level In Almost 8 Years by Michael Snyder for End of the American Dream
When people are having a harder time paying their bills, that is a signal that the economy is slowing down. This is something that we witnessed back in 2008, and it is something that is happening once again right now. Credit card charge-offs at major U.S. banks haven’t been this high since the U.S. economy was pulling out of the last recession, and the same thing is true regarding credit card delinquencies. So even though the mainstream media keeps telling us over and over that the U.S. economy is “booming”, the cold, hard numbers are telling us something completely different. This is a point that I made yesterday in my article about how homelessness is absolutely exploding in New York City, and it is a point I will undoubtedly have to make many more times as long as the mainstream media feeds us this fictional narrative about a “booming economy”. Look, the truth is that you can’t say that we have a booming economy until we have a year when the U.S. economy grows by at least 3 percent, and at this point we haven’t had that since the middle of the Bush administration.
And now there are all sorts of indications that the U.S. economy is really starting to slow down again. One of those indications is the fact that the level of credit card charge-offs has risen to the highest level since 2012…
Red flags are flying in the credit-card industry after a key gauge of bad debt jumped to the highest level in almost seven years.
The charge-off rate — the percentage of loans companies have decided they’ll never collect — rose to 3.82% in the first three months of 2019, the highest since the second quarter of 2012, according to data compiled by Bloomberg Intelligence. And loans 30 days past due, a harbinger of future write-offs, increased at all seven of the largest U.S. card issuers.
When something is the worst that it has been in nearly 7 years, that is definitely a red flag.
At the 4 biggest U.S. banks, credit card charge-offs now account for a whopping 80 percent of all consumer credit costs…
The four largest U.S. banks had almost $4 billion in charge-offs from credit cards last quarter, and just $656 million from all other consumer lending. That’s the biggest gap since at least 2009. Card charge-offs now make up more than 80 percent of total consumer credit costs, up from 67 percent three years ago.
And a lot more charge-offs are coming down the pipeline, because credit card delinquencies are now the highest that they have been in almost 8 years…
Not since the early part of this decade have so many U.S. consumers fallen behind on their credit cards and on auto loans arranged through car dealers, according to new bank industry data.
In the fourth quarter of last year, 3.22% of bank-issued credit card loans were at least 30 days late, which was higher than at any point since 2011, the data from the American Bankers Association showed.
U.S. consumers are being stretched financially to a degree that we haven’t seen since the last recession, and all the numbers indicate that this trend is only going to accelerate in the months ahead.
But of course bank executives are trying to spin things differently. Just consider the following comments from Capital One CEO Richard Fairbank…