|
|
|
|
Charge-Offs Up Slightly, Set New High |
|
|
|
Credit card charge-offs reached a new high of 7.74% in January, after 7.73% in December, and the increasing number of borrowers falling behind on payments means charge-off rates are almost certain to increase as the economy worsens, according to Moody's Credit Card Credit Indices.
Moody's predicted the charge-off rate index could move into double digits by the end of this year if unemployment keeps rising. The government releases the February unemployment rate, which could touch 8%, next Friday.
The January delinquency rate, which forecasts the charge-off rate, climbed to 5.94%, the highest in 17 years. The record high of 6.31% in January 1992 is likely to be passed in the months ahead, Moody's said.
Meanwhile, payment rates, which have been falling since early 2007, are near a five-year low. In January, the principal payment rate fell to 16.39%, about 2.7 percentage points below the rate in January 2008.
Moody's expects the payment rate to continue declining as customers who typically pay the entire balance every month spend less because of the recession and those who pay only the minimum face greater pressure to maintain that practice. |
|
|
ETA Members Only |
Login here to access your member information, membership status and member-only content.
|
|
Upcoming Events |
|
Compliance Day April 13, 2010 Mandalay Bay Resort & Casino Las Vegas, NV
Investment Community Forum April 13, 2010 Mandalay Bay Resort & Casino Las Vegas, NV Prepaid Day
April 13, 2010 Mandalay Bay Resort & Casino Las Vegas, NV 2010 ETA Annual
Meeting & Expo
April 13-15, 2010 Mandalay Bay Resort & Casino Las Vegas, NV Strategic Leadership Forum: The Future of Payments, Today October 26-28, 2010 The Breakers Palm Beach, FL |
|
|
Tel: 202.828.2635
