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As charge offs remain high, debt consolidation may assist in paying down debt
By Sam Craine on Jun 6th, 2010
A recent report from Fitch Ratings showed mixed results for credit card debt, as delinquencies dropped but defaults rose.
According to the firm, charge offs on credit card debt accounts increased 0.17 percentage points to 11.1 percent in April. So far this year, defaults on these accounts are averaging 11.17 percent, Fitch said.
"Chargeoff rates have been holding steady at over 10 percent for a full year now so the pressure on U.S. consumer credit quality is still clearly evident," Michael Dean, managing director at the firm, said.
However, credit cards that were at least 60 days late on payment fell to 4.18 percent, a drop of 0.09 percentage points. The number of accounts that were at least 30 days late declined as well to 5.53 percent.
The firm said it expects both delinquencies and defaults to remain at higher levels in the future. However, there may be help for consumers who are having trouble paying off debt.
One option they may consider is debt consolidation, which can help reduce interest rates. It can also make bills easier to pay by reducing the number of statements a consumer receives every month.
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