Like sports achievements, I have no doubt this so-called record will be broken soon, and in short order.
From the Financial Times:
US credit card delinquencies hit a record high in January, and further deterioration is likely as the economy slows down and unemployment rises, Fitch Ratings says.
Payments at least 60 days late rose almost half a percentage point last month to a record 3.75 per cent, said Fitch. Credit card lenders also wrote off loans to delinquent borrowers at close to record levels, and such “charge-offs” were expected to breach records in the coming months…
Late payments on credit cards crept higher throughout 2008, said Fitch, but signs of borrower stress rose in the fourth quarter as late payments surged by 18 per cent. Charge-off rates in January were 40 per cent higher than a year ago at 7.5 per cent and were expected to approach 9 per cent during the second half of 2009.
Late payments and defaults on credit cards have been closely linked with levels of unemployment, which have risen dramatically…
Rising late payments and defaults on credit card loans would hurt the performance of securities backed by credit card receivables, Fitch said, but downgrades would be limited in the near-term because of lower funding costs. Securities backed by credit card receivables have rallied in recent weeks, in part because of such lower cost funds, and as investors look forward to the launch of a new Federal Reserve programme to lend against such asset-backed securities.
However, analysts at Barclays Capital warn the rally could be short-lived amid continued economic deterioration and proposed bankruptcy legislation that could boost charge-off levels….
Credit card lending has historically accounted for between 15 and 25 per cent of pre-tax income at JPMorgan, Bank of America and Citigroup, according to Moody’s. Analysts expect these businesses to shrink as lenders tighten credit standards and cut credit lines.