Card Charge Offs Rise

After "bottoming out" at 4.61 percent in the in the fourth quarter of 2001, charge offs on bank credit cards at the 100 largest banks rose to 4.72 percent in the third quarter of 2002. However, smaller banks were having more problems with their credit cards. Standard and Poor reported that credit card charge offs peaked at a record 7.6 percent of receivables in March of last year. Chief Economist David A. Weiss expects losses to exceed 7 percent of outstandings in the first quarter of this year, although that level reflects seasonal factors as well. S&P downgraded various bonds backed by credit card receivables 47 times in 2002, the most in one year since the rates were first published.

Source: Federal Reserve Board

Data are seasonally adjusted. Delinquent loans are those that are past due 30 days or more accruing interest as well as those in a non-accrual status measured as a percentage of end-of-period loans.

Source: Federal Reserve Board