Three major credit issuers reported that credit card debt defaults saw an increase during August.
Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. all reported that credit card debt charge offs, which are loans the company no longer expects to get payment for, rose during the month. Bank of America had the highest charge off increase of the three as it saw defaults rise from 13.81 percent in July to 14.54 percent in August.
For Citigroup, charge offs climbed from 10.03 percent in July to 12.14 percent in August. JPMorgan Chase & Co. reported defaults were at 8.73 percent for August, after being 7.92 percent in July.
“The defaults are a wake-up call for those expecting a V-shaped recovery,” Elliot Spar, options market strategist at Stifel Nicolaus & Co., told Reuters.
The news about credit card debt defaults comes after recent numbers from the Federal Reserve show that revolving consumer credit fell during July. According to the Fed, revolving consumer credit dropped by an annual rate of 8 percent to $905.6 billion during that month.