US: Credit card defaults linked to subprime crisis?
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Credit card companies had to write off 4.58% of credit card bill payments as uncollectable in the first six months of 2007. That is up almost 30% on the first half of 2006.
There was also an increase in late payments and the quarterly payment rate dropped for the first time in over four years. In the view of Moody's rating agency this could be linked to the slump in the US property market and the fact that not so many borrowers are rolling mortgage debt into new and cheaper home loans. Recent rises in credit card losses can also be blamed on a steady increase in personal bankruptcy filings since 2005.
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