There were little to no signs of the end of the credit crisis on Main Street when credit card companies reported their card charge-offs today. Charge-offs, or loans the companies do not expect to be repaid on, remain very high on a month over month basis:
- JP Morgan charge-offs increased to 8.81% from 8.02%.
- Charge-offs at Capital One increased to 9.6% from 9.04%.
- Bank of America saw a slight decrease to 13% from 13.22%.
- Discover Financial saw an increase to 8.9% from 8.5%.
- American Express saw a slight decline to 7.6% from 7.8%.
Charge-offs tend to have a very high correlation with the unemployment rate. In addition, delinquencies appear to be stabilizing. This could be a sign that the problems in consumer credit are beginning to abate, but for now it’s clear that the credit crunch on Main Street isn’t over.
![Cullen Roche](https://pragcap.com/wp-content/uploads/2022/01/Headshot2022-1-144x144.png)
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.