Credit card defaults are less likely to rise in the fourth quarter, as they typically do, as delinquencies stabilize and monthly payment rates improve, according to Fitch Ratings.
Writeoffs for loans deemed uncollectible fell to 10.55% in July after setting record highs for five straight months as consumer credit quality showed "signs of life," Fitch said Monday in its prime credit card chargeoff index.
Moody's Investors Service, which reported a similar decline last month, said the trend may require the company to revise its forecast that chargeoffs will peak at 12% to 13% in 2010.
"The economic situation may have caused some front-loading of losses this year," Fitch analyst Cynthia Ullrich said in a press release.
