Credit Card Delinquencies Increase

Credit card delinquencies are on the up, new research from credit ratings agency Standard & Poor's (S&P) suggests.

According to the firm, the number of cards which had payments which remained unpaid for more than 30 days rose from 5.6 per cent to 5.88 per cent between the last quarter of 2007 and the first quarter of 2008: a trend which could show people taking an increasingly careless attitude to their personal finances over this period. The overall charge-off rate, in other words the number of people providers count as holding "bad" credit card debts, also rose from 6.17 per cent to 6.51 per cent.

However, S&P said that this sharper increase was more attributable to Barclays' takeover of card provider Goldfish than to a rise in customer irresponsibility, because the takeover brought Goldfish customers under the tougher charge-off policies held by the banking giant.

Elsewhere, the agency found that mainstream mortgage delinquencies increased from 2.11 per cent to 2.41 per cent over the three months. For sub-prime mortgages, which sees home loans lent to people with poor credit histories, this figure also went up from 19.41 per cent to 21.73 per cent.

Commenting, S&P analyst Kate Livesey said: "A reduction in refinancing opportunities for borrowers, the large proportion of loans due to revert from fixed or discount rates in the first half of 2008 into an environment of reduced credit availability, and the slowing economy are likely to keep delinquency figures high for the foreseeable future."