U.S. credit card delinquencies fell in December to the lowest level since September as five of the six biggest card lenders posted declines, Moody's Investors Service said.
Loans at least 30 days overdue, a signal of future defaults, dipped to 6.09% in December from 6.2% in the previous month, Moody's said Monday.
Delinquencies of 30 to 59 days, the earliest gauge of late payments, declined to 1.49% from 1.6%. Writeoffs of uncollectible loans dropped to 10.32% from 10.56%, Moody's said.
All of the six biggest U.S. card issuers, including Bank of America Corp., Citigroup Inc. and American Express Co., posted declines in December early-stage delinquencies. JPMorgan Chase & Co., the nation's biggest card lender, was the only one to report higher overall late loans, because of a "payment holiday" the company offered customers earlier in 2009, Moody's said.
"We believe that the incremental chargeoffs attributable to this payment holiday will be most pronounced in January's numbers, increasing the chargeoff rate for both Chase and the overall index," Moody's analyst Jeffrey Hibbs said in the report.
The decline in delinquencies was the first since July and the lowest since September's 5.97%. Unemployment could "plateau" at 10.5% by midyear and credit card writeoffs may peak as high as 13% in the first half of 2010, Moody's said. Writeoffs typically track the jobless rate, which held steady at 10% in December.