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Retail credit card charge-offs are poised to surge in the coming months as more borrowers fall delinquent, according to Fitch Ratings' Retail Credit Card Index results released last week. With consumers scaling back purchases and lenders restricting credit, retailers already are navigating a difficult holiday season, according to Mike Dean, Fitch managing director. Increased borrower defaults on store cards will complicate matters further in 2009, he says. Credit card delinquencies 60 or more days past due rose 92 basis points in November, to 4.81% from 3.89% in August, according to the index. As a result, Fitch expects charge-offs to exceed 12% in the first half of 2009 from 9.1% currently. "Rising delinquencies will pressure card issuers and their retail partners during the coming year, as Fitch expects a scenario akin to nearly one in eight cardholders defaulting on their store cards," Dean says in the report.
