In recent months, US banks such as JPMorgan Chase, Wells Fargo, and Bank of America have reported significant losses totaling nearly $5 billion due to escalating credit card delinquencies. The Federal Deposit Insurance Corporation (FDIC) has highlighted that banks wrote off $21.3 billion in bad debt in Q2 of 2024, primarily linked to both consumer credit card defaults and troubled commercial real estate loans. This figure marks the highest net charge-off rate since Q2 of 2013, reflecting a rising trend in financial distress among borrowers exacerbated by ongoing inflation and increased interest rates.
JPMorgan Chase revealed net charge-offs of $2.2 billion, a sharp increase from $1.4 billion a year prior, while Wells Fargo's charge-offs climbed to $1.3 billion, up from $764 million. Bank of America also reported $1.5 billion in charge-offs, a significant jump from $900 million year-on-year.
As economic pressures mount, the charge-off rate for credit cards has notably risen to 4.82%, indicating the highest delinquency levels observed since 2011. Such trends underline the precarious financial landscape as more consumers struggle to manage their debts.
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