NEW YORK--(BUSINESS WIRE)--Link to Fitch Ratings' Report: Credit Card Index: Movers & Shakers –
Rising chargeoffs last quarter indicate the beginning of a return to more normal levels for U.S. credit card ABS, according to Fitch Ratings in its latest quarterly 'Movers & Shakers' index.
Credit card chargeoff rates are now drifting up towards normalized levels following years of hovering at or near historic lows. Chargeoffs rose for the second straight quarter to 2.82%, ending the first half of 2016 roughly 6.5% higher than through the first six months of 2015. However, delinquencies remained at record lows indicating that chargeoffs are unlikely to rise rapidly any time in the near future.
'We expect chargeoffs to slowly rise to more normalized levels but still remain well within expectations over the second half of this year,' said Senior Director Herman Poon. While delinquencies fell below 1% last quarter, payment rates shattered record levels. Monthly payment rates rose for the second straight quarter, climbing to 28.40%. Additionally, ABS outstandings fell for the fourth straight quarter, now currently sitting at roughly $135 billion.
The U.S. Credit Card ABS Index is part of Fitch's series of structured finance index reports. The index reports are updated quarterly and are available at 'www.fitchratings.com' or by clicking on the above link.
Additional information is available at www.fitchratings.com.