Bank of America Corp. widened its forecast of home-equity loan losses beyond last month’s projections and said it has seen a “recent sharp increase” in customers using credit cards to buy necessities, Bloomberg reported.

These comments were made by Liam McGee, president of the company’s consumer and small business division at a conference in New York sponsored by UBS AG.

The second-largest U.S. bank expects home-equity loan losses to reach 2.5 percent of its $118 billion in housing-based loans, up from a previously projected loss of 2 to 2.5 percent. McGee also noted that customers have cut back on retail, travel and entertainment purchases, spending more on necessities.

Bank of America’s $4 billion purchase of Countrywide Financial Corp., the largest U.S. home lender, remains on schedule to be finalized in the third quarter, McGee said, but added that the bank expected “bumps on the road” during the transaction.