Bank of America, Chase Hit Hard By Customer Bankruptcies
NOTE: To offer our weekly summary of credit card rates, Credit Card Monitor, in your publication or on your Web site, please contact syndicate@indexcreditcards[dot]com. Bank of America and JPMorgan Chase & Co., like credit card giants Citi and Discover before them, disclosed losses in the millions as the result of increased bankruptcies.
Thousands of consumers had rushed to declare bankruptcy under more favorable terms before a new bankruptcy law took effect, significantly increasing the losses credit card companies would normally have to absorb. Bank of America expects an extra $400 to $500 million in chargeoffs (losses due to unpaid balances) in the fourth quarter; JPMorgan Chase expects $700 million more than in the third quarter, according to quarterly reports the companies filed with the Securities & Exchange Commission.
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