The four largest banks in the United States lost 20% more in their credit card portfolios in 2017 than they did in 2016, according to a published report.
The 20% loss equates to about $12.5 billion, up from $10.5 billion a year earlier. The banks mentioned in the article are: Citigroup, Bank of America, JPMorgan Chase, and Wells Fargo.
Meanwhile, a consultancy is protecting that losses in 2018 will continue to rise, although they will remain below the levels seen a decade ago during the Great Recession. Credit card losses will make up about 4.5% of credit card portfolios by the end of 2018, according to Mercator Advisory Group.
Losses are increasing at banks in their credit card portfolios as they race to attract more borrowers, engaging in a “rewards war” for affluent customers and by approving more card applications for borrowers with less-than-perfect credit.
After bottoming out in 2014 and 2015, losses on credit cards have increased steadily in 2016 and 2017 and are projected to increase again this year. Just in the fourth quarter alone, those four institutions wrote off more than $3 billion in bad credit card debt, more than 16% higher than the same period a year earlier.