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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory

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From: Paul Kern	4/14/2008 2:57:55 PM
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UPDATE: Credit Card Charge-Off, Delinquency Rates Up In Feb Last update: 4/14/2008 2:55:09 PM DOW JONES NEWSWIRES Credit card charge-off and delinquency rates rose in February, according to Moody's Credit Card Credit Indices, but the increases are not likely to hurt ratings on securities backed by credit card assets. Moody's does not expect the credit card sector to follow the declining subprime mortgage sector because of fundamental differences between the two. Its indexes track more than $445 billion of U.S. bank credit card loans backing securities rated by Moody's. The charge-off rate climbed to 5.59% in February - the highest rate since December 2005 - from 4.51% a year earlier. That was the fifth consecutive monthly increase from the previous month and the 14th month in a row that the rate was higher than the year-earlier period. The February delinquency rate was 4.53%, the highest since March 2004. The delinquency rate, which was 3.89% a year earlier, measures the proportion of account balances for which a monthly payment is more than 30 days late as a percent of total balances. Moody's noted that the delinquency rate on card balances less than 30 days past due has been relatively stable, while the delinquency rate on balances 90 days or more past due has been growing. Customers have been getting behind on credit card payments, as they have been with home and auto loans. The percentage of credit card balances being paid fell to 17.3% in February from 17.7% a year earlier. That was the sixth month in a row that the rate fell from the year-earlier period. -By Kathy Shwiff, Dow Jones Newswires; 201-938-5975; kathy.shwiff@dowjones.com (END) Dow Jones Newswires April 14, 2008 14:55 ET (18:55 GMT)

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