Monthly payment rates continued their downward spiral in March, falling below 18.50% for the first time since July 2005. The MPR, or the amount that cardholders pay on their credit card debt each month, peaked in October of last year, reaching almost 21%. The higher payment rates were driven by new minimum payment standards that took effect last year. Last week, Moody’s reported that the payment rate among credit card-backed securities fell slightly to 17.72% in February, after posting a record-setting forty-two months of consecutive year-over-year improvement. Moody’s noted that the combination of higher interest rates and a cooling off of the real estate market diminished the attractiveness of “cash out” refinancing activity in which many borrowers reduced their more expensive credit card debt by drawing on the equity in their home — either by refinancing their mortgages or by accessing their home equity lines of credit.
pre.
MONTHLY PAYMENT RATES
Apr 06: 20.01%
May 06: 19.68%
Jun 06: 19.99%
Jul 06: 20.46%
Aug 06: 20.20%
Sep 06: 20.02%
Oct 06: 20.83%
Nov 06: 20.01%
Dec 06: 19.70%
Jan 07: 19.88%
Feb 07: 18.79%
Mar 07: 18.21%
Source: CardData (www.carddata.com)
