The charge-off rate on card bonds, based on credit card charge-offs, jumped to a new high of 7.6% in March, up from 6.7% in February, according to Standard & Poor's. S&P, which monitors approximately $375 billion of receivables held in trusts of publicly rated credit card-backed securities, said March's loss rate is the highest since S&P founded its credit card quality indexes in January 1992.
March's charge-off rate is more than 150 basis points higher than last year's "The increase in loss rates was expected this month, although the magnitude of the increase may have been greater than anticipated," S&P said. S&P anticipates that charge-offs will continue to rise and stay above 7% through the second quarter. The loss rate has averaged over 7% for the past four months, S&P said.