Fitch: Less (Spending) Is More (Chargeoffs) For U.S. Credit Card ABS.NEW YORK New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Consumers are relying more on revolving credit Revolving Credit
A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. at a time when chargeoffs for U.S. credit card ABS are likely to rebound up to historically observed levels, according to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. Fitch Ratings Fitch Ratings
An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. in the latest edition of 'Credit Card Movers & Shakers'.
With economic growth moderating and expectations for contained inflation, the Federal Reserve declined to raise rates this month for the first time since June 2004. "Fitch expects contractual chargeoffs to rise towards historically observed levels of 5.5% - 6% to the extent that bankruptcy filings remain depressed," said Cynthia Ullrich, Director, Fitch Ratings.
Consumers' increased reliance on their credit cards may already be manifesting itself in the monthly payment rate, which fell 34 basis points (bps) to 17.63% and is 61 bps lower than this time last year. However, both prime (14 bps to 3.44%) and subprime (36 bps to 8.40%) chargeoffs continue to fall and lag behind last year's rates.
The latest edition of 'Credit Card Movers & Shakers', which covers the latest trends in the credit card ABS market, is available on the Fitch Ratings web site at www.fitchratings.com in the 'ABS' sector page under 'Newsletters'.
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