Credit card chargeoffs rose slightly in February, Moody's Investors Service said Tuesday, adding that the stabilization was another sign of impending improvement in credit card performance.
William Black, a senior vice president at the rating agency, said that as the effects of the spike in early stage delinquencies in the fall begins to wane, the ultimate peak in chargeoff rates may be reached this month or next.
If unemployment remains flat in the second half and delinquencies continue to improve, Moody's said, the chargeoff rate could peak at slightly below the long-held forecast of 12%. That compares with February's 11.08%, up from 11.07% in January. The all-time high was 11.5% in August.
The percentage of accounts with a monthly payment more than 30 days late fell in February to 5.91%, the lowest level since August.
The amount of a cardholder's balance paid fell slightly from January, which was expected because of the shortened month.
Yields on credit cards rose to 22.23% in February from 21.54% the previous month, the highest monthly rate in Moody's records.