And even more credit card pain

Trouble ahead for the banks (again) but now that they’re all so healthy and showing profits I guess they can sink or swim on their own. How are these numbers going down when unemployment is going up?

The U.S. credit card charge-off rate rose to a record high in June as more Americans lost their jobs, Moody’s Investors Service said Wednesday.

The Moody’s credit card charge-off index—which measures credit card loans that banks do not expect to be repaid—rose to 10.76 percent in June from 10.62 percent in May.

However, the index showed the slowest rate of increase in six months, with companies such as American Express, the largest U.S. credit card company by sales, posting declines in defaults.

“We call for a recovery of the credit card sector to begin once industry average charge-offs peak in mid-2010 between 12 percent and 13 percent,” Moody’s said in a report.

Credit card losses usually follow the trend of unemployment, which rose in June to 9.5 percent, the highest level in nearly 26 years. Moody’s estimated unemployment will peak next year at 10 percent to 10.5 percent.


An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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