Credit Card Delinquencies Rose Sharply

Both delinquencies and chargeoffs on credit card receivables were sharply higher in July 2001 than one year earlier according to Moody's Investors Services. Moody's Credit Card Indexes track the performance of about $335 billion of securitized credit card receivables. The delinquency rate (amount of loan balances 30 days or more past due as a percent of total dollars outstanding) was 5.06 percent in July 2001, as compared to 4.41 percent in July 2000. This marked the eighth consecutive month in which the delinquency rate rose on a year-over-year basis. Similarly, the chargeoff rate (dollar amount of loans written off as uncollectible, as an annualized percentage of total dollars of loans outstanding) rose to 6.47 percent in July 2001 from 5.16 percent a year earlier. This 25 percent jump is the sharpest increase since July 1997 and the sixth consecutive monthly increase relative to the previous year. The chart below displays both the delinquency and chargeoff indices over the past decade.

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