Credit Card Delinquency Rates Level Off

[steven johnson]

Source: Reuters

NEW YORK (Reuters) - The percentage of Americans falling behind on credit card bills stabilized in January, according to data from the six major lenders, signaling that U.S. consumer credit woes may be leveling off.

Shares of the credit card companies all jumped to at least one-week highs, as analysts said the loan delinquency rates were surprisingly benign, suggesting the worst for U.S. consumers may have already passed.

"What is very positive is that the delinquency trends ... were at the low end or better than the range that we were expecting," said Richard Shane, an analyst at Jefferies & Co. "The data is suggesting that not only will we see a seasonal recovery (in March or April), but there is a cyclical recovery that's beginning that will start to impact data in the second half of 2010."

Credit card charge-offs and delinquencies usually track U.S. unemployment, which fell to a five-month low of 9.7 percent in January. That surprised economists and hinted at a labor market recovery despite the loss of 20,000 jobs in the month.


Read more: http://www.nytimes.com/reuters/2010/02/16/business/business-us-creditcards.html?_r=1&ref=business

[FarCenter]

1. Credit card delinquencies follow the unemployment rate

So, since the unemployment rate leveled off, it is not a surprise.

[uppityperson]

2. I've an acquaintance that works in collections, says they are very very very busy

I have several friends who just got laid off in health care sector. We're not done yet

[marshall]

3. Could it be that they are just giving less credit cards to delinquents?

I work with university students and several years ago I was shocked at the ease with which a college student with no job and growing student loan debt could get one credit card after another. And more than one pointedly told me they looked on the credit limit as money in the bank rather than money they were borrowing and would have to pay back at high interest.

[truthisfreedom]

4. Lookee here: