Capital One shutting down accounts. Card delinquencies spike to 2008 levels.

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Credit card charge-offs and liquidations have hit their highest rate since 2008 for credit card issuers such as Capital One and Discover, a concerning sign for the outlook of the US economy. The Federal Reserve is starting to sign alarm bells about this.

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Recent reports from card issuers, including AMEX (American Express), also show an increase in delinquencies and charge-offs. A sign that US consumers are struggling to pay their bills and could be on the verge of reducing spending.

If consumer spending gets cut back, that’s something which could cause a recession. As spending accounts for almost 70% of US GDP.

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