Moody's: Credit Card Delinquencies Rise

Moody’s has some sobering data on credit card delinquencies: they’re up.  After several years of general improvements in payment performances, January of 2007 marked the beginning of a slide back down.

"In the credit card sector, year-over-year performance deterioration will likely be a common theme throughout 2007 since 2006 performance was unusually strong across the board," William Black, a senior vice president at Moody’s, said in a statement.

According to Moody’s, more credit card balances were written off as uncollectible in January and more borrowers fell behind in their payments.  The proposed culprit?  A rise in personal bankruptcy filings – which caught some analysts by surprise since bankruptcy filings dropped considerable after the laws were recently strengthened and updated.  However, filings, after the initial flurry of fear, have begun to climb back up.

The delinquency rate, which measures the proportion of account balances for which a monthly payment is more than 30 days late as a percent of total balances, rose to 3.91 percent in January from 3.40 percent a year earlier, according to Moody’s.