Credit card accounts, the next frontier:
Credit-card delinquencies and losses have risen with higher unemployment and personal bankruptcies, according to Moody’s Investors Service. Those trends will continue through 2009, even as issuers reduce credit limits and scale back on offers to entice clients.
Canadian card losses in the third quarter rose to 3.1 percent of average balances, the seventh straight period of year- over-year increases, according to Moody’s. By comparison, U.S. card losses rose to 6.6 percent of balances.
In the U.S., consumer credit is shrinking faster than estimates and credit-card line reductions are the greatest on record, analyst Meredith Whitney of Meredith Whitney Advisory Group LLC said yesterday in a note. About $2.7 trillion worth of credit lines will be removed from U.S. consumers due to the credit crisis and regulatory changes, 35 percent higher than her November estimate, Whitney said.