Calculated Risk has some new info from our TAXPAYER SUPPORTED TARP BANKS WHO CONTROL 87% OF THE CREDIT CARD MARKET. Credit card write-offs are soaring. So, mortgage write-offs are soaring, commercial loan write-offs are soaring, toxic assets make up the majority of their balance sheets, and these MEGA-BANKS supported by you and I are reporting profits and giving out bonuses. Hmm. Someone must be getting screwed somewhere. Oh Yeah. You are.
Credit card write-offs are increasing at an annual rate of 60% at B of A.
Credit card write-offs are increasing at an annual rate of 252% at Citicorp.
Credit card write-offs are increasing at an annual rate of 120% at JP Morgan.
Imagine that. If you give a credit card to someone with no income, no assets, and no ability to repay you, eventually you write-off the debt. But, no need to worry. The hard working middle class taxpayer who pays off their credit card bill every month is stepping into the breach. Our tax dollars are allowing deadbeats to run up credit card debt and then default.
Please do anything you can think of to hurt these TARP accepting banks.
Credit Cards: Most Institutions Report higher Write-Offs in August
by CalculatedRisk on 9/15/2009 07:42:00 PM
From Bloomberg: U.S. Credit-Card Defaults Resume Ascent as Unemployment Worsens (ht Bob_in_MA)Bank of America said write-offs rose to 14.54 percent ... That compares with 13.81 percent in July ...
Citigroup’s soured loans rose to 12.14 percent last month, from 10.03 percent, while JPMorgan said write-offs advanced to 8.73 percent from 7.92 percent in July ...
Discover Financial Services ... said charge-offs rose to 9.16 percent from 8.43 percent in July. ...
Capital One Financial Corp. ... said charge-offs improved to 9.32 percent in August, from 9.83 percent.
Moody’s Investors Service has said it expects average U.S. charge-offs to peak at 12 percent to 13 percent in 2010.As a reminder, the bank stress tests assumed a cumulative two year credit card loss rate of 18% to 20% for the more adverse scenario (only 12% to 17% for the baseline scenario). Right now losses are running worse than the more adverse scenario.
Also credit card loss rates tend to the track unemployment - so, as the unemployment rate rises into 2010, the credit card charge-offs will probably increase some more.