Monthly payment rates, the amount that cardholders pay on their credit card debt, collapsed in March to its lowest level in nearly eighteen months. While the dip historically has been seasonal, it appears that many borrowers are increasingly pressured by current economic factors. Among credit card-backed securities, payment rates reached nearly 22% last year driven by increased minimum payments and a robust economy. According to FitchRatings, the gross yield on credit card ABS increased 51 basis points in March to 18.21%, and is 30 basis points above year-ago levels. Fitch expects gross yield to remain stable as payment rates decline.
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ABS METRICS
YIELD MPR
Apr 06: 18.81% 21.74%
May 06: 17.61% 19.14%
Jun 06: 17.97% 21.00%
Jul 06: 17.63% 20.71%
Aug 06: 17.86% 20.24%
Sep 06: 17.96% 21.06%
Oct 06: 17.58% 19.30%
Nov 06: 17.96% 19.82%
Dec 06: 17.78% 19.32%
Jan 07: 18.28% 19.27%
Feb 07: 17.70% 20.80%
Mar 07: 18.21% 18.76%
Source: FitchRatings
