Monthly payment rates, the amount that cardholders pay on their credit card debt, soared in April setting a new industry record. Driven by higher minimum payments, the monthly payment rate was nearly 100 basis points over the prior record set in February. Rising interest rates have also played a role in driving the MPR north. Among credit card-backed bonds, the monthly payment rate was 21.74% in April, compared to 19.10% in the prior month and 18.52% one-year ago. According to FitchRatings, the payment rate averaged 19.97% during the first quarter and averaged 18.60% for 2005. Five years ago the monthly payment rate hovered around 15%. FitchRatings also says that payment rates bounced back after a decline in March's payment rate, which is a seasonal occurrence caused by fewer collection days in February.
Monthly Payment Rate
Nov 05: 18.78%
Dec 05: 18.90%
Jan 06: 19.97%
Feb 06: 20.85%
Mar 06: 19.10%
Apr 06: 21.74%
Source: FitchRatings
Monthly payment rates, the amount that cardholders pay on their credit card debt, soared in April setting a new industry record. Driven by higher minimum payments, the monthly payment rate was nearly 100 basis points over the prior record set in February. Rising interest rates have also played a role in driving the MPR north. Among credit card-backed bonds, the monthly payment rate was 21.74% in April, compared to 19.10% in the prior month and 18.52% one-year ago. According to FitchRatings, the payment rate averaged 19.97% during the first quarter and averaged 18.60% for 2005. Five years ago the monthly payment rate hovered around 15%. FitchRatings also says that payment rates bounced back after a decline in March's payment rate, which is a seasonal occurrence caused by fewer collection days in February.
