U.S. credit card chargeoffs edged lower in February after hitting a six-month high in January, according to Fitch Ratings, while delinquencies continued to ease.
However, the New York ratings company reiterated Friday that the sector's woes are likely to persist as employment stays weak.
Chargeoffs among prime-rated customers fell 0.1 percentage point, to 11.27%, in February, up 34% from a year earlier.
Fitch said that chargeoff rates have been volatile in recent months because issuers have offered a variety of incentives to cardholders, such as payment holidays. Citigroup Inc. reported a 150-basis-point rise in its chargeoff rate, and JPMorgan Chase & Co.'s rate fell 196 basis points.
"U.S. consumer credit quality remains under considerable pressure, although the pace of deterioration has moderated in recent months," Fitch managing director Michael Dean said in a press release. "Continued labor market strain means defaults and delinquencies will remain elevated for the coming months."
Meanwhile, the share of accounts at least 60 days past due fell 0.06 point, to 4.44%. Fitch said this delinquency rate has held stead between 4% and 4.5% for more than a year and remains above 2009's average despite two months of declines.
The 30-day delinquency rate fell by the same amount, to 5.66%. The ratings agency said it does not expect to see chargeoff rates slide until a significant decline in delinquencies occurs.
Still, Fitch said the results "could provide an early insight to a possible recovery for chargeoffs in the later months." Also, the proportion of monthly balances paid by customers fell 0.55 of a percentage point, to 18.8%, which is still 19% higher than a year earlier.