The Main Street Credit Crunch Continues

 |  Includes: AXP, BAC, COF, DFS, JPM
by: Cullen Roche

There were little to no signs of the end of the credit crisis on Main Street when credit card companies reported their card charge-offs yesterday. Charge-offs, or loans the companies do not expect to be repaid on, remain very high on a month over month basis:

  • JPMorgan (NYSE:JPM) charge-offs increased to 8.81% from 8.02%.
  • Charge-offs at Capital One (NYSE:COF) increased to 9.6% from 9.04%.
  • Bank of America (NYSE:BAC) saw a slight decrease to 13% from 13.22%.
  • Discover Financial (NYSE:DFS) saw an increase to 8.9% from 8.5%.
  • American Express (NYSE:AXP) saw a slight decline to 7.6% from 7.8%.

Charge-offs tend to have a very high correlation with the unemployment rate. In addition, delinquencies appear to be stabilizing. This could be a sign that the problems in consumer credit are beginning to abate, but for now it’s clear that the credit crunch on Main Street isn’t over.