Nation/World

Credit Card Issuers Take Big Write-Off Record 6 Percent Of Card Loans Written Off In Fourth Quarter

Credit card issuers wrote off record levels of bad credit card loans in the fourth quarter, and losses are expected to rise throughout the year, according to Standard & Poor’s CreditWire.

On average, banks wrote off 6 percent of card loans, up from 5.6 percent in the third quarter and 4.5 percent in the fourth quarter of 1995. CreditWire monitored the performance of $220 billion of loans that backed securities, about 66 percent of all outstanding card loans.

“Charge-offs likely will continue upward for a few more quarters, even without a deterioration in the economy,” S&P;, a unit of McGraw Hill Cos., said in a statement.

After driving earnings for banks in the early 1990s, rising loan losses and late payments have raised concerns among shareholders in banks and specialist credit card businesses.

Capital One Financial Corp., one of the industry’s best performers, had a surge in write-offs to 6.18 percent from 4.90 percent in September.

The portfolios of Advanta Corp., another card specialist, and regional bank First Chicago NBD Corp. also saw increases to high write-off levels.



Click here to comment on this story »







Sections


Profile

Contact the Spokesman

Main switchboard:
(509) 459-5000
Customer service:
(800) 338-8801
Newsroom:
(509) 459-5400
(800) 789-0029
Back to Spokesman Mobile