Record Bankcard Losses in May

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 - Analyst Report), MasterCard (MA - Analyst Report) or Visa (V - Analyst Report) -- 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 - Analyst Report), Bank of America (BAC - Analyst Report) and US Bancorp (USB - Analyst Report).

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Read the full analyst report on C

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Read the full analyst report on USB