Losses in the sub-prime credit card market are continuing to set new records. A decade ago it was very difficult for consumers with no credit history, or a bad credit history, to qualify for an unsecured credit card. That all changed in the mid-90s when some credit card issuers decided to go bottom fishing for new customers. The explosion in the issuance of sub-prime credit cards lasted for about six years. In mid-2001 the sub-prime market began to come apart as the economy fell into a recession. Losses in the sub-prime market are now approaching 19%. (Credit losses in the general credit card market currently average about 7%.) Among sub-prime credit card-backed securities, charge-offs or losses, soared to a record 18.9% in March compared to 17.88% in February. Among major sub-prime issuers, Providian reported last week that its charge-off rate among its securitizations increased to 19.89% for March, compared to 18.23% for February. Metris/Direct Merchants Credit Card Bank also reported last week that its managed net charge-off rate for the first quarter was 17.9%, compared to 18.2% for the fourth quarter, and 13.0% for 1Q/02. Capital One, which has about 40% of its business in the sub-prime market, reported this week that its overall charge-off rate hit 6.47% in the first quarter, compared to 4.70% one year ago. (Capital One’s overall rate is artificially low due to its strong growth in total loans.) But the 38% rise in Capital One losses is significant. In early March, Spiegel, another sub-prime credit card specialist, shut-down its credit card business after losses became unreasonable. The Spiegel Group has since filed for bankruptcy protection.