Creditnet News Story
Charge offs improved in July
Wednesday, September 1, 2010
By Thomas Astery
Consumers seem to have had a better time paying off their credit card debt in July than in previous months, as rates for charge offs dropped.
According to the latest monthly numbers from Standard and Poor's Ratings Services, the final numbers related to charge offs for July were fairly encouraging. The rate of accounts that credit card lenders have been forced to strike from their books as being irretrievable dropped a full percentage point, from 9.7 percent in June to 8.7 percent in July. The report said this was the first time that rate slipped below 9 percent since March 2009.
The report said consumers reduced spending and had greater difficulty in opening new lines of credit because credit card issuers have tightened restrictions on the kind of borrowers they will lend to. As a result, the outstanding balance for all credit cards dropped 1 percent from June's total to $341.9 billion. That is a 17.1 percent drop from July the previous year.
Consumers may have pared back spending as a result of the continuing high unemployment figures being observed across the country.
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