Federal Reserve Bulletin

Profits and Balance Sheet Developments at U.S. Commercial Banks in 2005

Figure A. Charge-off rate on credit card debt in securitized pools, and household bankruptcy filings, 1993-2006. Data plotted as curves. The charge-off rate on credit card loans, shown on the left axis, starts in 1993 at about 5.5 percent, generally falls to reach about 4 percent in mid-1995, generally rises to about 7 percent by early 1997, generally falls to about 5.5 percent by mid-2000, generally rises to about 7 percent by mid-2003, generally falls to about 5.5 percent by late 2005, rises to about 7 percent around the end of 2005, drops to about 3.5 percent by early 2006, then ticked up slightly in March. Household bankruptcy filings, shown on the right axis, starts at the beginning of 1995 at about 350 filings per 100,000 persons, generally rises to about 500 filings by early 1998, generally falls to about 400 filings by late 1999, generally rises to about 600 filings by late 2002, generally falls to about 480 filings by late 2004, rises to about 900 filings in late 2005, then drops to about 180 filings in early 2006.

Note: The data for bankruptcy filings are quarterly and extend through 2006:Q1; the data for credit cards are monthly at an annual rate and extend through March 2006. The charge-off rate is the proportion of total loans outstanding that have been written off as uncollectible.

Source: For bankruptcy filings, staff calculations based on data from Lundquist Consulting, Inc.; for data on credit card debt in securitized pools, Moody's Investors Service.  Return to article