ADVERTISEMENT

Report: Credit card late payments hit record high

Recession takes toll as lenders charge off more bad debt

By CreditCards.com staff

Credit card late payments hit a record high in January, according to a report released Feb. 4, as the recession continues to take its toll on consumers.

The Fitch Ratings report paints a bleak picture of credit card delinquencies. It projects that charge-offs will breach the 8 percent mark in coming months and approach 9 percent during the second half of 2009. Charge-offs occur when credit card lenders give up on collecting a debt and charge it off their accounts.

"U.S.consumers continue to struggle in the face of mounting pressures on multiple fronts, from employment to housing to net worth," said Fitch Managing Director Michael Dean. Fitch watches credit card delinquency and charge-off rates for the purpose of rating the asset-backed securities that credit card issuers assemble and sell.

Late-pay and charge-off rates were not evenly spread out. The charge-off rate for prime general purpose cards, for example, rose about a half point to 7.50 percent. But retail card charge-offs hit 10.51 percent, 44 percent higher than a year ago.

See related: How credit card securities work

Published: February 4, 2009


Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.




Follow Us


Updated: 09-30-2016


Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.


ADVERTISEMENT