Credit card loan portfolios in Canada performing well

The performance of credit cards in Canada softened slightly in the second quarter of 2008, but showed remarkable stability compared to the performance of credit cards in the United Kindom and the United States, says Moody’s Investors Service in a new report.

During the additional quarter, the charge-off amount in Canada rose to 3.07%, up from 2.89% a year ago, a amount that is beneath than bisected the amount in either the U.S. (6.38%) or the UK (6.57%). The charge-off amount in Canada is rising, says Moody's, but the trend is moderate.

Moody's says the charge-off amount could move aloft its 3.32% celebrated high, accomplished in September 2003, if the unemployment amount and claimed defalcation filings in Canada abide to rise.

The additional division 2008 crime rate, which measures the admeasurement of annual balances for which account transaction is added than 30 canicule accomplished due and is generally a augury of movements in the charge-off rate, rose to 2.29%, from 2.13% a year ago, but fell from 2.53% in the aboriginal quarter.

During the second quarter Canadian cardholders paid back, on average, 32.22% of their credit card debts, which is actually about 3.3% higher than last year’s second quarter rate of 31.18%. Second quarter payment rates, as measured by Moody’s U.S. and UK Indices, were 18% in the U.S. and 17.24% in the UK, by comparison.

Canada’s less volatile economic environment and relatively low number of bankruptcy filings may also have contributed to the flatter delinquency and charge-off rates, says Inamdar.