Fitch Ratings continues to see symptoms of the credit crunch escalating into next year, with credit card chargeoffs approaching 10% by this time next year, it said Monday.

The ratings agency had said in March it expected chargeoffs would approach 9% by the end of this year as unemployment continues to grow and consumers' ability to service debt weakens.

Credit-card issuers usually charge off receivables after they've been delinquent for 180 days, or within 60 days of a bankruptcy filing.

Fitch said many large credit-card issuers pointed toward "significant worsening" in second-quarter metrics as they released their first-quarter results. Few were even willing to forecast beyond the second quarter because of the economic uncertainty. As a result, Fitch said credit-card losses would be "meaningfully higher" in the second quarter.

Prime chargeoffs of 8.41% have been rising steadily from a low of 3.1% at the close of the first quarter of 2006.

Fitch said despite the negative trends, it believes downgrades in credit-card asset-backed securities would be limited because of efforts by issuers to stem the deterioration and preserve their current ratings.

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