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Fitch ratings shows delinquency rates have dropped to lowest level in sixteen years
By Peggy Stillwell on Sep 2nd, 2010
Fitch Ratings reported earlier this week that credit card defaults in the month of July dropped to 9.65 percent, the lowest level in 16 months. Late-payment rates for a number of major credit cards showed a notable improvement between June and July.
Although the rate dipped below 10 percent for the first time in over a year, the Associated Press notes that the charge-off index - the amount of debt paid off by the banks - is more than 60 percent above average.
"The trends are encouraging, but card defaults are still elevated historically and are expected to remain so," Fitch managing director Michael Dean told the AP. "Unemployment will continue to weigh on consumer credit quality throughout the rest of this year and well into 2011."
At the beginning of the 2008 recession, Americans struggled to repay mounting credit card debt. The Credit Card Accountability, Responsibility and Disclosure Act has given consumers more protection from issuers and provided them with the tools they need to avoid debt in the future.
Americans still finding difficulty handling their credit card debt can consider consolidation. Combining debt and taking out a loan with a lower interest rate can reduce monthly payments.
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