Consumers Fall Further Behind on Credit Card Debt

   

Posted: May 11, 2009

Record numbers of people are falling behind on consumer credit debt, badly damaging their credit scores in the process.

The latest figures from Fitch Ratings show that its Credit Card Charge-off Index now stands at 8.89 percent, the second consecutive record high. These statistics mark a 44-percent increase over this time last year and an 18-percent increase since the beginning of the year. Despite the record numbers, Fitch did indicate that the default rate appears to be slowing.

"While the slowdown in rate of delinquency increase could prove encouraging if it persists, it is too early to proclaim a trend. Charge-offs and delinquencies will likely continue climbing over the near term," said Michael Dean of Fitch.

Charge-offs are generally considered to be accounts that lenders have given up trying to collect on, and Fitch estimates that the nationwide rate could hit 10 percent by the end of the year. Consumers are still held accountable for the charge-offs.

Delinquencies, which represent credit card accounts more than 60 days past due, were said to have increased 35 percent in the last five months.