FINANCIAL SECTOR
Analysts split on whether credit card debt is cause for worry
Executives and analysts see one data point as key: jobs, and US unemployment is near a record low
New York — For Kevin St Pierre, the maths on credit cards is pretty simple. "Generally, if the consumer has income, they pay their debts," St Pierre, an analyst at Sanford C Bernstein, said in a note to clients. "Consumer credit losses are driven predominantly by unemployment." With investors skittish over the potential for higher defaults on vehicle and student loans, St Pierre is one of many industry analysts and banking executives who have sought to allay similar concerns over rising credit card write-offs. Card balances eclipsed $1-trillion in February, the most since the 2008 financial crisis. Card issuers all reported higher write-offs in the first quarter. Still, executives and analysts see one data point as key to the health of the industry: jobs. US unemployment is near a record low and as long as it stays there, consumers should be able to handle their card debt. "We’re not losing any sleep that we can’t manage the credit situation," Mark Graf, the chief financial officer ...
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