Credit Quality is on the Decline
A decline in credit quality is a big cause for concern throughout
the credit card industry, with credit card charge offs increasing to
5.1 percent of receivables in 1996 versus only 3.6 percent of
receivables in 1995.
The number of collection charge offs has nearly doubled in the
last three years according to industry experts, and the trend is
alarming to virtually everyone in the industry.
On a brighter note, Chain Store Age reports that nearly 20
percent of household disposable income each month is now dedicated to
reduction of credit card debts, the highest level since 1990.
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