Charge-offs on credit card loans are rising sharply. While many analysts blame this trend on an expanding supply of credit cards, a closer look reveals the importance of two demand factors - wealth and the share of the population at peak borrowing age - in explaining the increase in bad debt

Credit card lenders have been writing off loans at sharply higher rates since 1995, suggesting that riskier borrowers are acquiring credit cards. What makes the new borrowers riskier--even more than their personal characteristics and attitudes toward debt--is the fact that they carry higher debt...

Charge-offs on credit card loans are rising sharply. While many analysts blame this trend on an expanding supply of credit cards, a closer look reveals the importance of two demand factors--wealth and the share of the population at peak borrowing age--in explaining the increase in bad debt.