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U.S. markets recover from steep losses
NEW YORK, Oct. 16 (UPI) -- Credit card defaults are rising among U.S. consumers in an already tightening credit environment, various banks said.
J.P. Morgan Chase said credit card account defaults rose 45 percent in the third quarter compared with the same period a year ago. The bank predicted 7 percent of their credit card loans would be in default in 2009, The Washington Post reported Thursday.
Capital One, also expects credit card defaults to reach 7 percent next year. In September, 6.34 percent of their credit cards accounts went into default, up from 5.96 percent in August.
The data points to a national spending habit that has U.S. credit card holders living beyond their means.
"Given that the savings rate has been minuscule, there are no reserves in the tank for the consumer to tap his savings to support his spending," Scott Valentin, a financial services analyst at Friedman Billings Ramsey told the Post.
Credit card debt has risen 75 percent in the past 10 years, while U.S. wages and savings rates have stayed flat, the Post reported.
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