Credit card companies are experiencing losses at their swiftest pace in nearly three decades, excluding the Great Financial Crisis, as reported by Goldman Sachs.

The decline in credit card losses hit its lowest point in September 2021, and while initial increases were likely due to the reversal of stimulus effects, they have been steadily climbing since the first quarter of 2022.

This surge in losses resembles the trend observed during the 2008 recession and is showing no signs of abating, according to Goldman Sachs, CNBC reported.

Presently, the losses have reached 3.63%, a 1.5-percentage-point increase from the lowest point, and Goldman anticipates them to escalate by an additional 1.3 percentage points, reaching 4.93%.

This concerning development comes at a time when Americans collectively owe over $1 trillion on their credit cards, marking a record high, according to data from the Federal Reserve Bank of New York.

Written by staff