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Credit card companies are posting their fastest losses in nearly 30 years outside of the Great Financial Crisis, according to Goldman Sachs.

Credit card losses bottomed out in September 2021, and while the initial increases were likely a reversal of stimulus measures, they have been increasing rapidly since the first quarter of 2022. Since then, it has been an increasing loss rate, only seen in recent history during the 2008 recession.

It’s far from over, the company predicts.

Losses currently stand at 3.63%, up 1.5 percentage points from the trough, and Goldman expects them to rise another 1.3 percentage points to 4.93%. This comes at a time when Americans owe more than $1 trillion on credit cards, a record high, according to the Federal Reserve Bank of New York.

“We expect defaults could continue to remain below seasonality through the middle of next year and expect losses for most issuers to not peak until late 2024/early 2025,” analyst Ryan Nash wrote in a Friday Notice.

What is unusual is that losses accelerate outside of an economic downturn, he emphasized.

Of the last five credit card loss cycles, three have been marked by recessions, he said. The two events when the economy was not in recession occurred in the mid-1990s and between 2015 and 2019, Nash said. He used history as a guide to identify further losses.

“In our view, this cycle is similar to the characteristics of the late 1990s and is somewhat similar to the 15-19 cycle, where losses increased after a period of strong credit growth, and which has seen a similar pace of normalization so far in this cycle.” Nash said.

History also shows that losses tend to peak six to eight quarters after credit growth peaks, he said. That means the credit normalization cycle is only in the middle, hence the forecast for late 2024, early 2025, he said.

Nash sees the biggest downside risk for Capital One Financial, followed by Discover Financial Services.

—CNBC’s Michael Bloom contributed reporting.

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