Find the best credit card offers online.Analysts expecting a turn around for the credit industry coming soon received a major blow as Moody’s Investor’s Services said that more credit card holders are paying their debts late for the month of November.
The recent economic downturn nearly brought many of the major credit card companies in the U.S. to their knees when massive credit card write offs and delinquencies became the norm. For the past few months, credit card companies were beginning to look up as delinquencies and charge offs slowly went down. However, figures taken by Moody’s from November show a serious reversal of the trend.
Moody’s Credit Card Index measured the U.S. credit card charge-off rate at 10.56% for the month of November. That is a serious setback considering that, in the past few months, that number has been slowly going down. For October, the charge off rate in the credit industry had dropped to 10.04%. Last June, the charge off rate had risen to an all time high of 10.76% and had slowly gotten better until November.
Aside from the charge off rates, the delinquency rates also saw an up tick during November. In October, delinquencies were at 6.1% and in November, it was at 6.2%. The figures already includes every credit card payment that are already behind by 30 days to 180 days but are yet to be written off. The delinquency rate peaked at 6.4% during March.
Along with all this worrying signs, Moody’s reports one positive sign in the credit card payment numbers. Even with an increasing number of consumers getting late on their credit card payments, this year’s dollar amount for delinquent balances is much lower than last year’s for credit cards that are issued from the country’s six largest credit card companies.
Early stage delinquency rates – credit card payments that are only 30 days to 60 days late – dropped to 1.6% for November from 1.66% in October. However, Moody’s does not consider the figure to be static and the slight improvement may not actually indicate a trend among consumers.
Moody’s forecasts that credit card payment delinquencies will continue to go up through the winter season. Charge off rates are also forecast to continue to go up, peaking up to either 12% or 13% during the middle of 2010.
Lastly, the principal payment rate – the average principal amount that credit card holders pay off for each month – dropped to 16.42% in November from 17.31% in October.
