NEW York (CNNMoney.com) -- American consumers are defaulting on their recognition card game at a sharply higher charge per unit compared to last year, in what could be another effect of the recent subprime mortgage marketplace crisis, according to a study published Tuesday.
In addition, late payments are also up, cardholders are showing marks they are less willing to pay and recognition card companies have got written off 30 percentage more payments during the first one-half of this twelvemonth versus a twelvemonth ago, the Financial Times reported.
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The recognition evaluation federal agency Moody's told the paper the job could be owed to the place marketplace lag and fewer householders opting not to refinance their residences.
"The combination of higher involvement rates and a softer existent estate marketplace diminished the attraction of mortgage refinancings in which many borrowers reduced their more than expensive recognition card debt by drawing on the equity in their home," Moody's told the paper.
At the same time, Moody's said that the people defaulting on their recognition card game may not be the same people defaulting on their subprime place loans. The federal agency cited stricter underwriting criteria in the recognition card industry and the fact that borrowers with small or no equity in their places may take to default on on their abode before giving up their recognition card, according to the paper.
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