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THE CREDIT CRUNCH ON MAIN STREET CONTINUES

15 December 2009 by Cullen Roche 0 Comments

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 today.  Charge-offs, or loans the companies do not expect to be repaid on, remain very high on a month over month basis:

  • JP Morgan charge-offs increased to 8.81% from 8.02%.
  • Charge-offs at Capital One increased to 9.6% from 9.04%.
  • Bank of America saw a slight decrease to 13% from 13.22%.
  • Discover Financial saw an increase to 8.9% from 8.5%.
  • American Express 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.

Cullen Roche

Cullen Roche

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