Credit card charge-offs, delinquencies reverse upward trend
Decline shows promise that losses may slow
Is the soaring credit card charge-off and delinquency trend finally reversing itself?
According to a report released Aug. 21 by credit card trend tracker Moody's Investor Services, it is.
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Credit card charge-offs are balances that are written off as uncollectable. A delinquency marks when a credit card payment is more than 30 days past due.
This positive news could signal an end to the massive credit card losses experienced by issuers in 2009, but William Black, senior vice president of Moody's, cautioned against too much early optimism.
"July tends to mark an inflection point with respect to seasonal trends. As we move into the second half of the year, we expect delinquencies will again rise as back to school and holiday expenditures compete with credit card payments," says Black in a New York Times article.
Analysts have projected that charge-offs will continue to rise through 2010 to coincide with rising unemployment.
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