The American economy is struggling in more ways than one. Americans around the country are having a hard time making minimum payments and mortgage payments. Everyone has seemingly “tightened their belts.” Out of all of the bills out there, which one is taking the biggest hit? Credit cards.

The number of two-month credit card delinquencies has risen 24% since August. More and more consumers are finding themselves unable to pay simple credit card bills. These consumers don’t expect to get out of this bind anytime soon.

Retailers and merchants are already feeling the nationwide pinch. Consumers have stopped spending money. However, as the number of credit card defaults continues to rise, the situation will only worsen.

Recent statistics show us that approximately one in every eight credit card holders is in trouble. One in eight card holders will likely default on a department-store-issued credit card. The Fitch Retail Credit Card Index predicts more charge offs in the near future. Charge offs are debts that are deemed to be “uncollectable”. Fitch expects the number of charge offs to surpass 12% in the first half of 2009. The number of current charge offs is already 40 percent higher than the highest levels in 2007.

There is a bit of surprising news however. The Fitch Index reports that retail credit card portfolios remain healthy. How could this be when the number of defaults has escalated so much? The interest rates that are being charged to consumers exceeds the number of charge offs. Thus, the “healthy” retail credit card portfolio status.

So, how reliable is the Fitch Retail Credit Card Index? Well, it tracks more than “$72 billion in principle receivables backing approximately $40 billion of retail or private label credit cards.” Citibank Omni Master Trust and GE Private Label Master Trust are the largest issuers in Fitch’s Index. Some major retailers that are included in the Index are: Wal-Mart, Home Depot, Inc., J.C. Penny Co. Inc., Best Buy Co, Sears Holdings Corp.