The headline is misleading for a charge off means the credit card company has determined they ain't ever seeing the money. So the number of Americans unable to actually make their payments is probably higher. This news is two days old but significant considering unemployment is skyrocketing past estimates. Credit card charge-off rate nears 10% -Moody's:
The Moody's Credit Card Index's charge-off rate -- debts that card issuers believe they will never collect -- rose to nearly 10 percent in April, the highest level in the index's more than 20-year history, the report said.
This pace of rising charge-offs is unprecedented as year-over-year changes continue to surpass the magnitude of either increases or decreases experienced during any previous period
Remember the Stress Tests? Credit cards were estimated at 20% losses, that's total losses, not just charge offs.
Unemployment also unexpectedly increased.
nitial claims for jobless benefits rose last week by 15,000 to a seasonally adjusted 627,000. Economists had expected a drop to 600,000. Several states reported more claims than expected from teachers, cafeteria workers and other school employees, a Labor Department analyst said.
The number of people who are continuing to receive unemployment insurance rose by 29,000 to 6.74 million, slightly above analysts' estimates of 6.7 million. The four-week average of claims, which smooths out fluctuations, was largely unchanged, at 616,750.
Chase
Rumor has it that they are sending all their customers notices that the minimum payment is being changed from 2% to 5% effective August or September. They are instantly going to force a lot more still-employed ppl into default who simply cannot make a payment that large. I haven't yet figured out what the end game is there - why would it be in their interest to force a lot of people to default very quickly - but clearly, there's something in it for them at the end. In and of themselves, charge-offs are not desirable.