Retail credit card accounts might experience higher chargeoff levels this year. This segment of the credit card business is more volatile than prime credit card accounts and are sensitive to economic pressures, Fitch Ratings said in a new credit card performance index.
The newly launched Retail Index, which starts off with three years of historical performance data, has been experiencing an upward trend in chargeoff levels. It currently stands at 6.11%. Compared with absolute chargeoffs of 4.21% in the prime market and 9.23% in the subprime sector, it follows an across-the-board trend of increasing losses that is expected to continue through 2007. In recent months, wrote Fitch analysts, all three credit card sectors have seen gradual increases in delinquencies of 60 days or more.