19 Feb More People Will Fall Behind On Their Credit Cards This Year, Says Rating Agency
Rating agency Moody’s has recently given a negative outlook to the U.S. credit card sector. In its report, “2007 Review and 2008 Outlook: US Credit Card-Backed Securities,” Moody’s noted that although delinquencies and charge-offs are on the rise in credit card accounts, the levels are still nowhere near all-time highs. Current charge-off levels are still below long-term averages.
Moody’s expects a rise in delinquencies and charge-offs over 2008, but how far they will rise depends on the economy. And the impact will be felt on a bank-by-bank basis.
William Black, Moody’s SVP and author of the report, noted that contractual charge-offs should rise “significantly” in 2008. A contractual charge-off occurs when a cardholder falls behind on payments by 180 days, prompting the issuer to write-off the debt.
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