Find the best credit card offers online.Indicating that the credit card industry has yet to recover, major credit card companies JPMorgan Chase & Co, Capital Financial Corp and Discover Financial Services reported a rise in credit card charge off rates for the month of November. The announcement underlined the financial stress that consumers are still dealing with and sent shares downwards throughout the industry.
JPMorgan Chase & Co, the largest Visa branded credit card issuer in the U.S., recently said that their charge off rates - loans that the company writes of as unpayable - rose to 8.81% for the month of November from 8.02% for October. The announcement came when the company recently made a regulatory filing. JPMorgan’s charge off increase is the biggest among the credit card issuers in the U.S. It is far from the only one, however.
Discover Financial Services also announced a rise to 8.98% of their charge off rates from a previous rate of 8.54%. Capital One Financial Corp’s charge off rates went up to 9.60% from a previous rate of 9.04%.
Argent Capital Management senior portfolio manager, Ken Crawford said that it is a sign that American consumers are still financially hurting, especially with the holiday season fast approaching.
On the other hand, the largest bank in the U.S., Bank of America posted a drop in its charge off rate for the third straight month. Last October, the company’s charge off rates was at 13.22%. In November, that dropped to 13.00%. Despite this positive announcement, Bank of America still remains as the credit card company with the highest rates of defaults and delinquencies.
Usually, credit card delinquencies and charge offs follow the unemployment trend. In November, national unemployment trends dropped to 10.0% from a previous high of 10.2% in October, the highest it has been for twenty six and a half years. Although the unemployment rate did drop, 11,000 people still lost their jobs last month which is probably a major contributing factor to the increase in credit card delinquencies and charge offs. Analysts also expect the unemployment rate to continue to remain high throughout next year, 2010.
To stem their losses which has crept up to record highs in the past few months, credit card companies have closed down several millions of accounts, cut down credit limits and slowed down or discontinued rewards programs. They have also hiked up credit card interest rates and fees, well ahead of the upcoming, consumer friendly credit card law.
