NEW YORK – Credit rating agency Fitch, Inc. is forecasting that credit card charge-offs will increase by at least 35% during 2008 and that auto loans losses will increase by at least 50%.
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Losses rose in the last half of last year, ending a five-year decline, the agency said. The loss rate on prime loans more than doubled from midyear, to 1.34%, while the rate for subprime loans nearly doubled, to 7.56%.
"While these expected increases, coupled with 2007 increases, may be alarming, they are occurring off of multiyear lows," said Kevin Duignan, a managing director with Fitch.
Credit card and auto loan charge-offs increased 5.21% last year after falling to historic lows several years ago.
