Credit card losses are mounting, a reversal from a six-year trend that could be a warning sign for markets and the broader economy, the Wall Street Journal reported today. The average net charge-off rate for large U.S. card issuers — the percentage of outstanding debt that issuers write off as a loss — increased to 3.29 percent in the second quarter, its highest level in four years, according to Fitch Ratings. The quarter was also the fifth consecutive period of year-over-year increases in the closely watched rate. All eight large issuers, including JPMorgan Chase & Co., Citigroup Inc., Capital One Financial Corp. and Discover Financial Services had increases for the quarter. While losses are rising, they remain low compared with historical levels and the 10% net charge-off rate they hit in early 2010. Lenders say they aren’t expecting a return to crisis-level losses and the increases are largely a return to normal after a period of abnormal lows.
