Credit-card losses edge higher, bad news for U.S. banks
For now, there’s no cause for panic. The strong U.S. economy and low unemployment means most consumers are able to stay current on debt payments — new foreclosures and bankruptcies fell to the lowest level in at least 15 years in 2018. Yet the uptick in card losses is unmistakable. Credit-reporting company Experian Plc said some of the blame goes to banks offering credit to riskier borrowers, and the Federal Reserve has noted a spike in late payments by the elderly.
“We do see card delinquencies a little higher and a slight uptick in the most recent couple of quarters,” Matt Komos, TransUnion’s vice president of research and consulting, said in an interview, adding that he doubts the trend is a harbinger of bad news for banks. “Delinquencies, while moving upward, are probably hitting a more normal level for the amount of credit that’s out there.
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