In the US, JPMorgan Chase and Bank of America, are reporting significant losses from unpaid bills. The combined net charge-offs from these banks have reached a staggering 4.5 billion dollars. They say the rise in unrecoverable debts is primarily due to credit card payments that borrowers are unable to meet.
The losses indicate a worrying trend of financial pressure on consumers, particularly those with below-prime credit scores. High-interest rates and inflation are worsening household spending issues, leaving some struggling to keep up with their loans. This situation has prompted most banks to tighten lending standards, affecting access to credit for many including those seeking home equity lines of credit, and auto and other consumer loans.
