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The U.S. credit card charge-off rate rose to 7.74% of overall card receivables in January, up from 5.48% during the same period a year earlier. The January charge-off rate increased slightly from 7.73% in December, according to Moody's Credit Card Credit Indices, which track more than $420 billion of U.S. bank credit card loans backing securities Moody's rates. "Even though the level of charge-offs is essentially flat compared to a month ago, an increasing number of borrowers are falling behind on their credit card payments, indicating that charge-off rates will almost certainly increase in the coming months," the report states. The charge-off rate measures credit card account balances written off as uncollectible as an annualized percentage of total loans outstanding. The January delinquency rate, which measures the proportion of account balances for which a monthly payment is more than 30 days late, rose to 5.94% from 4.51% last year. Cardholders paid back 16.39% of their credit card debts in January compared with 19.06% during the same month last year.
