In Brief: Card Chargeoffs Rise A 6th Straight Month

Credit card chargeoffs reported in May for the April collection period totaled $843 million, pushing the Fitch Credit Card Performance Index to 6.95%, said Fitch Investors Service.

It was the third straight record month and sixth consecutive rise for the index. Though the number of master trusts reporting higher chargeoffs slowed from the month earlier, Fitch does not see this as an indication of relief, considering expected seasonal peaks in June and July. Issuers have combated these trends by raising fees and rates charged to cardholders, as well as tightening underwriting standards.

Fitch predicts the index to continue rising through the rest of the year, as personal bankruptcy filings are expected to top 1.5 million by yearend and consumer debt burdens continue to grow.

Master trusts reporting the largest chargeoff increases were Chase Manhattan, First Chicago, and Discover.

Posting improved results were AT&T Universal, Capital One, and Providian (formerly First Deposit).