Canadians are increasingly defaulting on their credit card payments, according to a major financial ratings firm.

The credit card charge-off rate — a measure of credit default — rose 60 per cent to 4.8 per cent in the second quarter of 2009, according to Moody's Canadian Credit Card Index. Though slightly lower than the first quarter rate of this year, the rate was higher than the 3.1 per cent reported in the second quarter of 2008.

Charge-offs mean a company has decided it cannot collect a debt and charges it off its books.

"A surge in the number of personal bankruptcy filings underscores the persistent weakness in the economy and the unemployment rate continues to rise," reads the report.

The report says that a high unemployment rate, which stood at 8.7 per cent in August, and predictions it will rise to 9.6 per cent in the second quarter of next year, means charge-off rates will likely increase.

The Canadian Credit Card Index charge-off rate is still better than those of the U.S. and U.K., the report says. In the second quarter of 2009, the U.S. index showed a charge-off rate of 10.5 per cent and the U.K. Index showed a rate of 8.7 per cent.