Delinquent balances on U.S. credit cards reached record levels and defaults surged in December, according to Fitch Ratings, who warned charge-offs appear set to go even higher in coming months.

Credit-card loans have come under pressure from the economic downturn. Even with the economy making tentative steps toward recovery and stock markets 10 months into a rally, unemployment is a persistent thorn in lenders' sides. Fitch said Tuesday it expects U.S. unemployment will peak at 10.4% in the second quarter and remain in double digits throughout 2010.

"U.S. consumer credit quality remains under considerable stress due to persistently weak labor-market conditions," said managing director Michael Dean. "As a result, chargeoffs will retest their recent highs throughout the first half of 2010."

The rate for loans delinquent two or more months reached an all-time high of 4.54% for the December Credit Card Index, which is based on performance through the end of November. That is above the previous record of 4.45% in June.

Charge-offs rose to 10.68% from 10.09% a month earlier.

Despite the unfavorable trends, Fitch still expects ratings of credit-card asset-back-securities tranches to remain stable.

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