In May 2009 the U.S. Credit Card Quality Index, which tracks about 53% of the outstanding debt on bankcards and private label and retail cards that back credit card asset-backed securities rated by S&P, indicated less than rosy data.

The index showed for bankcard trusts — American Express (AXP), MasterCard (MA) or Visa (V) — losses reached a record 10.0% for the month, for a 66.8% increase from May 2008. U.S. retail cards losses (to include gas and department store cards) increased 12.2% the highest point since January 2000, when the statistic was first tracked.

As to be expected, there is a fairly close correlation to unemployment, which increased 70.9% the past 12 months. The expansion of losses among the trusts outpaced unemployment growth by 49.3% to 38.2% over the past six-months respectively, as the rise in unemployment continued to make it difficult for consumers to pay down credit card debt.

Based on S&P estimates, card losses should average 10.5-12.5% during the next 12-18 months. This ominous prediction should translate to elevated mortgage and commercial losses at but not limited to Citigroup (C), Bank of America (BAC) and US Bancorp (USB).
Read the full analyst report on “AXP”
Read the full analyst report on “MA”
Read the full analyst report on “V”
Read the full analyst report on “C”
Read the full analyst report on “BAC”
Read the full analyst report on “USB”
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