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CU System
Delinquent credit card accounts increase
SAN FRANCISCO (12/27/07)--With Americans deeper in credit card debt that they were a year ago, credit unions may want to keep tabs on their members' accounts and step up financial counseling and education efforts before others reach the delinquency point. Credit card accounts are entering delinquency at a faster rate, with serious delinquencies growing at the highest rate, says an Associated Press (AP) analysis of data from the nation's largest card issuers (The Wisconsin State Journal Dec. 24). Until recently, credit card default rates were at near-record lows. Analysts, who studied detailed monthly filings with the Securities and Exchange Commission of 17 large credit card trusts, blame the deterioration of household credit on leakage from the subprime mortgage crisis. The greatest increases--50% or more--were reported for accounts more than 90 days overdue by lenders such as HSBC, GE Money Bank and Advanta. In October, accounts that were at least 30 days late jumped 26% to $17.3 billion from a year ago. That accounts for more than 4% of the total outstanding principal balances owed to the trusts on credit cards issued by large banks and retailers. Defaults rose 18%--to almost $961 million--during October, according to filings made by the trusts with the Securities and Exchange Commission. The data represent roughly 325 million individual accounts held in trusts that were created by credit card issuers to sell the debt to investors. The accounts represent about 45% of the $920 billion that the Federal Reserve counts as credit card debt owed by Americans.
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