The 75 billion dollars credit card Avalanche

The U.S. credit card providers face massive defaults due to depreciation. According to estimates by analysts, the failure rates this year from the current six to seven to nine to ten percent. The losses would be 70 to 75 billion dollars correspond. “The situation is deteriorating rapidly. The downward trend will continue,” said Walter Todd, portfolio manager at Greenwood Capital Associates, the news agency Reuters.

The most recent alarm came from American Express (Amex) from. The credit card company last month reported a significant increase in loan defaults. The failure rate was in February to 8.7 percent from 8.3 percent the previous month increased, the credit card on Monday evening. The Amex securities closed 3.3 percent weaker at $ 12.66.

Even large banks are affected

The share of the credit card provider was in March for the first time in 14 years under the brand slipped from $ 10. The background was the concern that in the U.S. given the economic downturn, an unexpectedly high number of loan defaults is threatening.

In the United States are piling up credit card losses: In February, the U.S. climbed 8.1 percent unemployment to its highest level in 25 years. Households, therefore, advised in arrears, which companies such as Amex to depreciation on assets forces.

Even the big U.S. houses are affected: For Citigroup – one of the largest providers of MasterCard Cards – the default rate climbed in February last from 6.9 to 9.3 percent. Something better, it looks to JP Morgan Chase and Capital One: For JP Morgan, the default rate climbed in February to 6.35 percent, while Capital One reached 8.1 percent.

The credit card provider lift its opposition to the downward trend: they aggravate the award standards and close problem accounts. Meredith Whitney, one of the most prominent financial analyst inside the United States, assumes that the existing credit lines from the current $ 5400 billion by 2010 almost half.

In doing so, the company also to unconventional means. So rewarded with the first Amex card customers if they pay their debts and accounts closed. The company enjoys the debtor for a gift card worth $ 300.

Analysts are skeptical about the whole industry. “Over the next 12 to 18 months, the pain industry,” said John Williams, analyst at Macquarie Research.