Creditnet News Story
Dow Jones: AmEx VC says company may see drop in credit card defaults
Monday, February 8, 2010
By Thomas Astery
Stable economy could lead to decline in charge offs.
Given the fact that the economy may be stabilizing, some companies that make credit card offers may see a drop in the amount of loans they have to write off.
According to a recent report from the Dow Jones Newswire, Ed Gilligan, a vice chairman for American Express, said that the company could see defaults on credit card debt make sequential drops during the second quarter if the economy continues to show signs of stability.
The news organization also said that Gilligan expected charge off rates in the first quarter of this year to be roughly the same as levels seen during the last quarter of 2009, when they were reported to be at 7.5 percent.
One sign that the economy may be hitting a stable patch is the fact that the country's gross domestic product increased 5.7 percent in the fourth quarter of 2009. An increase in GDP may calm lenders enough for them to want to make more credit card offers to consumers.
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