Kaulkin Ginsberg Calculates U.S. Consumer Credit at Risk of Default Increased Over 25 Percent in February

ROCKVILLE, MD – The amount of U.S. consumer credit at risk of default jumped to $24.53 billion in February – representing a 25 percent increase from the $19.55 billion estimated in January, according to Kaulkin Ginsberg, the leading strategic advisor to the debt collection / accounts receivable management industry (ARM).

“The amount of consumer credit at risk of default has been rising steadily with the deteriorating economy,” said Dimitri Michaud, Kaulkin Ginsberg Consumer Finance Analyst. “The February ’09 total of $24.53 billion in consumer credit at risk is $13.3 billion more than the corresponding amount of risk from February of last year – that’s an increase of over 118 percent year-over-year.”

This sharp rise in potential default was due to increases in both consumer bankruptcy filings and in adult unemployment levels from the prior month, factors that are weighted in Kaulkin Ginsberg’s calculations.

Although many factors play a role in what eventually leads to default, employment and bankruptcy rates show a decided cause and effect. Unemployment and “underemployment” numbers have a direct consequence on consumer liquidity, but they also represent a gauge of potential bankruptcy. In turn, bankruptcy filings have a direct impact on debt collection.

Kaulkin Ginsberg publishes two proprietary indices to track consumer liquidity. The Consumer Default Risk Index (CDRI) provides a monthly barometer of how bankruptcy and unemployment levels are likely to impact debt collection and is used to calculate the dollar amount of consumer credit at risk.  The Credit Card Performance Index (CCPI) is a monthly index tracking the performance of securitized credit card receivables for the ten largest credit card master trusts in the United States.

For more information, visit: www.insidearm.com/go/research/consumer-finance-report

About Kaulkin Ginsberg
Kaulkin Ginsberg is the leading boardroom-level advisor to the Accounts Receivable Management Industry (ARM). Since 1991, credit and collection professionals, owners, and investors worldwide have relied on the company for the insight, access and information needed to make well-informed decisions. Consulting and M&A services cover almost every stage of a company’s lifecycle, from strategic analysis to growth and exit strategies. Kaulkin Ginsberg’s media division – publisher of insideARM.com – is the leader in providing timely news and perspective on the recovery of debt in all industries. For more information, visit www.kaulkin.com.