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Credit card debt hits lenders and consumersHowever, the economic climate also has negative results for the credit card companies themselves. Nationwide levels of chargeoffs and delinquencies have reached new highs this year, while showing signs of at least leveling off in recent months. This week, Fitch Ratings said the credit card delinquency rate will remain high well into next year, and that bankruptcies and unemployment will continue to rise in that period. This causes lower revenues for credit card companies at a time when many of them are bracing for federal limits on late fees and interest rates set to take effect by February. According to Fitch, credit card purchase volumes fell at an annual rate of 13.7 percent in the third quarter, adding that the industry is "cautious" in its outlook on the coming holiday shopping season. The lower purchase volume is consistent with government statistics showing that Americans have been steadily paying down credit card debt and other loans in recent months while also increasing their personal savings rate. Economists are also awaiting more consistent gains in consumer spending to help fuel a strong recovery. The credit card industry may have seen one positive sign earlier this week. A report by Bloomberg News notes that emerging spending by affluent customers has apparently helped American Express record a noticeable improvement in purchase volumes. The next quarter's credit card sales figures are likely to see a bounce because of the holiday shopping season. However, looking ahead it will be important to see whether or not the recession has produced a permanent change in the way consumers manage their credit card debt.
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