Credit card charge-offs and delinquencies showed first signs of slowing down in July 2009.
According to a report released Aug. 21 by credit card trend tracker Moody’s Investor Services, it is.
The credit card charge-off rate fell to 10.52 percent in July — the first decline since September 2008. And the delinquency rate dropped to 5.73 percent — the lowest this year.
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.
See related: Fed report: Credit tightens again, but not as rapidly, Job fears keep credit card balances falling, Credit card charge-offs, delinquencies break records again