Serious credit card delinquencies and net chargeoffs tapered off in the second quarter, marking the first time in four years that the measures have declined in tandem, according to Veribanc Inc.

As of June 30, net chargeoffs declined to 1.36% of outstanding credit card debt, down from 1.41% on March 31 and 1.39% for mid-1997.

Veribanc's serious delinquency indicator-loans 90 days or more overdue- dropped to 2.01% of receivables from 2.18% in the first quarter. It was up from 1.95% a year earlier.

The finding dovetails with a recent American Bankers Association report that the percentage of outstanding card-loan dollars 30 days delinquent fell to 4.57% in the second quarter from 5.42% in the first.

All such numbers are relative, said Warren Heller, research director at Wakefield, Mass.-based Veribanc. The last time Veribanc reported a drop in both indicators from one quarter to the next was in June 1994. The quarterly chargeoff rate was 0.72%, delinquencies 1.26%.

Unless banks make "significant further improvement" in credit card debt defaults, the industry could get slammed by the next economic downturn, Mr. Heller said.

The Veribanc report also said that if chargeoffs were eliminated, issuers could reduce credit card interest rates by 5.5 percentage points.

"These high chargeoffs and delinquencies are viewed by the industry as just the cost of doing business," Mr. Heller said.

"Competition in the industry is so fierce, we're not likely to see a significant improvement in these numbers," he added. "What we worry about and what regulators worry about is what happens if the economy turns down?"

Mr. Heller said the competitive pressure to add customers, which has resulted in "teaser" interest rates as low as 0%, goes against the grain of prudent lending.

Lending is gathering steam after a slowdown last year. Veribanc said credit card debt held by banks rose in the 12 months through June by 15%, to $459 billion.

The growth rate was only 8.3% in the year that ended June 30, 1997.

Borrowers who "don't fit" into reasonable lending standards "get into the programs," Mr. Heller said.

Still, the improved delinquency trend seems to indicate that tighter lending criteria have taken hold.

"The industry has responded in a proactive way in trying to manage this risk while at the same time making credit available to a large segment of our population," said Keith Leggett, senior economist at the ABA.

But he added, "while most households are doing very well, there are some that are having some difficulty."

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