What Is The Charge Off Rate Used For?
Credit card issuers, banks, and other lenders report their charge off rates to federal regulators allowing them to keep track of charge off statistics for various different types of lending. Generally, credit cards have one of the highest charge off rates, often as much as three time the charge off rate for an auto loan. Creditors can examine the charge off rate statistics published by the Federal Reserve and use the information to help set interest rates for loans.
