Consumer delinquency still high, but slowing

Consumers are still buried in debt but may be starting to dig themselves out, said a recent report by Moody's Investor Service.

Reuters reported this week that the U.S. credit card charge-off rate - a measurement of loans that are expected to be defaulted - is at an all-time high, but has shown the slowest rate of increase in six months.

However, small businesses might not be out of the woods yet, as Moody's expects the charge-off rate to keep increasing until it peaks in 2012, thereby continuing to impact small business' working capital, sales, and ability to access credit.

The Moody index did show a silver lining in the number of credit card delinquencies, which fell for the third consecutive month to land at 5.81 - the lowest so far this year, Bloomberg reported.

"If delinquencies continue to improve beyond the typical seasonal pattern, then a similar trend in charge-offs may follow," Moody's said in a statement.

Credit card debt and delinquency data usually follow the unemployment rate, so a relief to consumer debt may have to wait until job losses level off, economists believe.

Transunion recently projected that the credit card delinquency rate may taper off by 2010.