Rapid Rise in Credit Card Losses Signals Warning Signs for Consumers and Banks

Credit card losses in the U.S. have risen at the fastest pace since the Great Recession of 2008, reaching 3.63% and expected to continue climbing to nearly 5%, according to Goldman Sachs analysts. This unusual rise in losses is occurring alongside record levels of credit card debt and increased loan growth. The cycle resembles previous periods of strong loan growth followed by rising losses, and it is projected to peak in late 2024 or early 2025. Capital One and Discover are expected to experience the highest losses, while Synchrony and American Express are also projected to see increased losses into 2025.