Credit Card Giants Like Chase Facing Boost in Loan Loss Reserves

As banks as diverse as JP Morgan Chase & Co. and Discover Financial Corp. offer hints about how the biggest bank accounting change in decades will affect their bottom lines, a common theme is emerging: credit cards.

If a bank has a sizable chunk of credit card customers, new loan loss accounting rules coming into force in 2020 will hit them harder than banks with higher volumes of short-term commercial loans.

The reasons are nuanced, but it comes down to the crux of the forthcoming accounting change—that businesses must look to the future and estimate losses over the life of ...