JPMorgan Chase (NYSE: JPM), the largest U.S. bank by assets and a top credit card lender, expects card loan losses to rise significantly this year as credit quality returns to historical norms.

For much of the past three years, consumers have had excess savings buoyed by federal stimulus payments and as a result of reduced spending when people were hunkering down to prevent the spread of COVID-19. But as inflation soared this year and people drew down their savings, there have been signs that consumer finances are weakening.

In 2023, JPMorgan expects this trend to continue, although it still doesn't see credit quality rising to levels that it would deem alarming. Here's why.

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Source Fool.com