Rise in US Credit Card Delinquencies may be Peaking
The rise in US credit card delinquencies may be peaking as the rate of unemployment growth slows, CreditSights says in a new report.
- While charge-offs have been accelerating, the rises in delinquencies in credit card ABS have been slowing in recent months. This slowdown may simply be a seasonal slowdown in delinquencies.
- However, the slowdown coincides with a deceleration in job losses, which have tended to be a leading indicator of charge offs. And so if this slowdown in unemployment growth is sustained it may signal that charge offs are close to peaking.
- The rises in delinquencies coincide with the most substantial falls in credit card debt outstanding as lenders reduce their exposure and households look to deleverage their balance sheets.
Although, the growth in delinquencies may be slowing and may in turn bring a peak in charge offs we do not believe that credit card ABS are necessarily out of the woods.
You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
