After hitting the stratosphere in April, monthly payment rates on credit card-backed bonds came back to earth in May. Payment rates, the amount that cardholders pay toward outstandings each month, climbed to a record 18.52% in April before dropping 134 basis points last month. However, the trend is still upward as the MPR is tracking 42 basis points above year-ago levels. According to FitchRatings, the monthly payment rate among prime issuers was 17.18% in May and 16.76% one-year ago. The increase in MPR over the past year has been attributed to cardholder behavioral changes and debt consolidation via home equity loans.
| MONTHLY PAYMENT RATES |
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| (Prime Credit Card-Backed ABS) |
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| Apr 04: | 16.76% |
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| Dec 04: | 17.09% |
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| Jan 05: | 17.70% |
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| Feb 05: | 17.64% |
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| Mar 05: | 16.32% |
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| Apr 05: | 18.52% |
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| May 05: | 17.18% |
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| Source: FitchRatings |
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