US credit card chargeoffs break new record - Moody's
* Chargeoff rate rises over 10 percent for the first time
* Moody's sees chargeoffs peaking at around 12 percent
* Moody's says bad loans will peak in Q2 2010
NEW YORK, June 24 (Reuters) - The U.S. monthly credit card chargeoff rate surpassed 10 percent and hit a sixth straight record high in May, Moody's Investors Services said on Wednesday, as unemployment grew to a 26-year high.
The chargeoff rate index -- which measures credit card loans the banks do not expect to be repaid -- rose to 10.62 percent in May from 9.97 percent in April.
"We expect the chargeoff rate index to continue to rise in the coming months but at a slower pace, as it peaks at around 12 percent in the second quarter of 2010," Moody's senior vice president William Black said in a statement.
The Moody's index also showed delinquencies -- monthly payments more than 30 days late -- fell to 5.97 percent in May from 6.34 percent in April.
However, the agency said it was due to a seasonal trend, as consumers used tax refunds to pay back debts, and estimated delinquencies will resume their upward trend.
Credit card losses usually follow the trend of unemployment, which rose in May to 9.4 percent and is expected to peak over 10 percent by the end of 2009.
With credit card losses across the industry surpassing the 10 percent this year, loan losses in the industry could top $70 billion, according to analysts' estimates.
According to data released by credit card companies earlier this month, based on on the performance of loans that were securitized, defaults rose across the board in May, with a steep deterioration of Bank of America Corp's (BAC.N) lending portfolio.
American Express Co (AXP.N) -- the largest U.S. credit card company by sales volume -- and Citigroup Inc (C.N) -- the largest issuer of MasterCard branded credit cards -- also showed big credit card losses.
However, JPMorgan Chase and Co (JPM.N) -- the largest issuer of Visa branded credit cards --, Discover Financial Services (DFS.N), and Capital One Financial Corp (COF.N), showed better than expected default rates. (Reporting by Juan Lagorio, editing by Derek Caney)
