Consumer payment of credit card bills is falling in the US, with continued late-payment and un-collectible rates rises: revealed in Moody’s Credit Card Charge-Offs, Delinquencies Rise in November, released on December 29th.
In November the balance of US credit cards deemed to be un-collectible rose to 10.56 percent, fifty basis points higher than in the previous month. The charge-off rate on US credit cards is expected to rise further to 12 to 13 percent in mid 2010. The delinquency rate, a measure of debts that are 30 to 180 days late, has also risen to 6.2 percent. The average principal payment rate on credit card slipped by 0.89 percent to 16.42 percent. The excess spread and the yield on credit cards fell to 7.7 and 21.09 percent, respectively.
On a single positive note, the measure of payments late by only 30 to 60 days fell by six basis points to 1.6 percent. Elaborating on this fall, Jeffrey Hibbs, Moody’s Analyst, said, “…while this improvement is somewhat encouraging, the measure tends to experience some monthly volatility and we would not interpret the single month of improvement as evidence of any turn in consumer credit trends”.
Photo by The Consumerist
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