Credit Card Payments Fall Further Out of Reach
After a few months of promising statistics on credit card debt and payments, the AP files a report that shows last month consumers fell further behind on their credit card debt and are making smaller payments on their bills.
The report, conducted by Moodys, shows:
- After a few months of catching up, credit card debt is catching up to more people once again
- People are making smaller payments on their credit card bills
- More credit card bills are 30-180 days late
- People are carrying less credit card debt – but they’re still behind
The charge-off rate counts credit card debts “written off as uncollectable” by the credit card companies. This measurement is a good reflection of how many people are falling dangerously behind on their credit card bills.
For November, the charge-off rate was 10.56 percent, close to June’s record high. That’s an increase of one half a percentage point after two straights month of decline.
The same survey, done by Moody’s, also shows a slight increase in the delinquency rate. A credit card is considered delinquent if the payments are 30-180 days late. What’s more, the report also finds that people are making smaller payments on their bill, and paying down less of the principal.
Moodys expects delinquencies and late payments to continue through the winter. Holiday shopping bills will hit the mail in January, and the extended unemployment benefits are beginning to run out for many workers laid off last fall. These could combine to form some serious credit debt problems.