JPMorgan Chase, Wells Fargo, Bank of America and Citi are unloading billions of dollars in bad debt that they’ve given up on recovering.
New earnings data shows the four largest banks in the country collectively recorded $6.9 billion in net charge-offs in Q3 of this year, primarily driven by credit card delinquencies and soured consumer loans.
JPMorgan says its net charge-offs hit $2.087 billion in Q3, up nearly 40% from $1.497 billion registered in Q3 of 2023.
Wells Fargo says its net charge-offs surged to $1.111 billion in Q3, an increase of nearly 54% from $722 million recorded a year ago.
Citi says its net credit on losses reached $2.172 billion, an over 32% jump from the $1.637 billion witnessed in the same period last year.
And BofA says net charge-offs hit $1.534 billion in the same quarter, up 64% from $931 million a year ago.
The news comes after US credit card rates hit a fresh all-time high in August.
Adam Kobeissi, founder and editor-in-chief of The Kobeissi Letter, says rates have increased by seven percentage points in just two years, hitting 23.4% a couple of months ago.
In addition, total outstanding US credit card debt has soared to $1.36 trillion – the highest level in history.
“US consumers now have a record $1.36 trillion in credit card debt and other revolving credit meaning they pay a massive $318 billion annual interest.
To put this into perspective, Americans paid just half of that in 2019 at ~$160 billion.
Meanwhile, credit card serious delinquency rates are at 7%, the highest level since 2011. The credit card debt bubble is popping.”
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