Creditnet News Story
Credit card defaults fall in October
Monday, November 30, 2009
By Danielle Robson
Accounts that are late on payment see an increase.
In good news for people who are trying to keep an eye on their credit score, Moody's Investors Service reported the number of defaults fell during October.
According to the firm's credit card index, charge offs - credit card debt lenders no longer expected will be repaid - fell to just above 10 percent in October after being at 10.72 percent in September. Credit card defaults reached a high of 11.5 percent in August.
Though defaults fell, Moody's index did indicate that credit card debt accounts at least 30 days late saw an increase in October. Delinquencies went up from 5.97 percent in September to 6.12 percent for October. That marks the third month in a row that delinquencies increased.
As more people find it difficult to make payments on time, it could indicate that credit card defaults could rise. If defaults increase, it could be more difficult for consumers to get credit card offers, as lenders pull back on available credit in order to limit their losses. The report from Moody's indicates that charge offs could peak at 13 percent next year.
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