U.S. Credit Card Defaults Soar

Credit card defaults continue to soar in the U.S., with write-offs jumping to a record high of 11.49% in August, from 10.52% in July. The default rate was greatest in loans which are 30-59 days overdue, surging to 1.65% from 1.41%.

Increases in these “early-stage” delinquencies usually signals concern for greater losses in the future. As the unemployment rate is expected to continue trending up, the near term doesn’t look very positive for credit card issuers, as the rate of default tends to follow suit.