Credit card defaults up, delinquencies down in March
Delinquencies on credit cards continued to climb in March, while the first quarter saw a new high in defaults, according to a recent report.
Moody’s Investors Services said that charge offs – debts card companies no longer expect will be settled – rose 0.13 percent from February to March. While that month’s rate was at 11.21 percent, the first quarter saw charge offs at 11.12 percent, which is the highest number seen in more than 20 years.
The month did see a drop in delinquencies rates on cards, which takes into account the percentage of accounts that are more than 30 days late. The 5.79 percent reported for March marks the fifth straight decline for delinquencies.
“The drop in delinquencies returned the rate to the levels of last August,” Moody’s said.
An increase in defaults was expected, the company said, because last fall saw an increase in delinquencies. Cards that are late in payment are often an indicator of future defaults.
However, things may be looking up for the economy, as both Capital One Financial Corp and American Express Corporation showed an increase in net incomes during the first quarter after facing losses in prior periods.
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