Steady Rise for Credit Card Charge Offs, Delinquencies

Credit card charge off rates rose to 4.13 percent in the fourth quarter of 2007, up from 4.00 percent in the third quarter, and a rise of 17 basis points from 3.96 percent in the fourth quarter of 2006, according to a recent report from the Federal Reserve.

Credit card delinquency rates rose to 4.55 percent in the fourth quarter of 2007, up from 4.34 percent in the third quarter, and up from 3.92 percent in the fourth quarter of 2006, the Fed reported.

The Fed has tracked charge-off and delinquency rates on a quarterly basis for credit cards and other loans since 1985. It uses statistics from the Federal Financial Institutions Examination Council to compile to data. The FFIEC is made up of the major federal banking regulators, including the Fed, the Federal Deposit Insurance Corp., the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision.

The charge off rate for residential real estate loans was 0.44 percent in the fourth quarter of 2007, the highest since the third quarter of 2001. One year ago the rate was 0.12 percent.

The delinquency rate on residential real estate loans was 3.09 percent in the fourth quarter last year, compared with 1.91 percent in the same period in 2006.

Commercial real estate charge offs and delinquencies are also on the rise. Charge offs hit 0.35 percent in the fourth quarter of 2007, up more than 300 percent from 0.08 percent in the same period in 2006. Delinquencies on commercial real estate were 2.71 percent in the fourth quarter of 2007, compared with 1.32 percent in the same period a year ago.

The Fed has tracked charge-off and delinquency rates on a quarterly basis for credit cards and other loans since 1985. It uses statistics from the Federal Financial Institutions Examination Council to compile to data. The FFIEC is made up of the major federal banking regulators, including the Fed, the Federal Deposit Insurance Corp., the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision.