Moody’s: Consumers paid off more credit card debt again in June
Backing up the internal reporting from issuers released recently, Moody’s Investor Services new numbers highlighted just how effectively consumers have been able to pay off their credit card debt.
Moody’s reported that credit card charge offs – those outstanding balances that lenders erase from their ledgers because they are deemed uncollectable – dropped again in June, from 10.71 percent to 10.28 percent, a decline of 43 basis points. The fall moved the charge off rate below the one for the same month last year, when it stood at 10.76 percent, marking the first annual decline since December 2006.
Moody’s also found that credit card delinquencies – those payments more than 30 days late – declined as well. The rate of 5.08 percent marked the eighth consecutive monthly fall, and is the lowest rate recorded since November 2008.
Many economists have been puzzled that the delinquency and charge off rates can drop so consistently while unemployment remains so high. Often these numbers move in similar directions, but that has not been the case over the last few months.