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<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published January 9, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>US credit card defaults soar
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(NEW YORK) US consumer credit deteriorated in December as credit card defaults rose and cardholder payment rates suffered the largest one month drop on records hurt by a deepening recession, Fitch Ratings said in a report.
Fitch said the charge-off index, a measure of default, of prime credit cards rose 31 per cent last month against a year ago to a four- year high of 6.84 per cent. The agency expects it to reach 8 per cent in 2009.
In addition, monthly payment rates, the rate at which cardholders repay outstanding balances, fell 246 basis points month- over-month to 15.96 per cent, the lowest level since 2004.
'Consumers continue to struggle amid a rapidly deteriorating employment situation and from declining property values and other measures of wealth,' said Mike Dean, managing director at the rating agency.
The outlook is gloomy, as consumers struggle with a deepening recession and the highest unemployment rates in 15 years.
And conditions in the US are expected to get much worse, with forecasts that the economy could have shrunk by as much as 6 per cent in the fourth quarter and is expected to keep declining for the next six months. -- Reuters
</TD></TR></TBODY></TABLE>
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>US credit card defaults soar
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
</TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20></TD><TD>Print article </TD></TR><TR class=font10><TD align=right width=20></TD><TD>Feedback</TD></TR></TBODY></TABLE>(NEW YORK) US consumer credit deteriorated in December as credit card defaults rose and cardholder payment rates suffered the largest one month drop on records hurt by a deepening recession, Fitch Ratings said in a report.
Fitch said the charge-off index, a measure of default, of prime credit cards rose 31 per cent last month against a year ago to a four- year high of 6.84 per cent. The agency expects it to reach 8 per cent in 2009.
In addition, monthly payment rates, the rate at which cardholders repay outstanding balances, fell 246 basis points month- over-month to 15.96 per cent, the lowest level since 2004.
'Consumers continue to struggle amid a rapidly deteriorating employment situation and from declining property values and other measures of wealth,' said Mike Dean, managing director at the rating agency.
The outlook is gloomy, as consumers struggle with a deepening recession and the highest unemployment rates in 15 years.
And conditions in the US are expected to get much worse, with forecasts that the economy could have shrunk by as much as 6 per cent in the fourth quarter and is expected to keep declining for the next six months. -- Reuters
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