Monthly data released Tuesday by the major credit-card issuers signal a continued turnaround in a sector hit by losses stemming from souring loans and borrowers falling behind bills.

The latest numbers on the performance of credit-card loans, from issuers including Capital One Financial Corp., Discover Financial Services, JPMorgan Chase & Co. and Bank of America Corp., indicate that while credit losses remain at elevated levels, their pace of increase is tempering for most card issuers. Another bright spot: Delinquency rates, a key gauge of future losses, are slowing.

Even though these numbers come amid fiscal woes in Europe, stock-market declines at home and stubbornly high unemployment, the next challenge for credit-card issuers likely won't be rising defaults, but the growth of their book of card loans.

"Card issuers have already made pretty significant changes in their portfolio" to minimize the downside, said Bill Hardekopf, chief executive of and an author of The Credit Card Guidebook.

To fight losses from card loans, companies have been scaling back on credit in the last several months and getting tougher about lending standards. Now, with the worst likely behind them, they are tasked with the balancing act of increasing lending to spur revenue but not loosening standards. In addition, the clamor for credit may be tempered by consumers, stung by the recession, borrowing less.

Issuers of credit cards - including Citigroup Inc. and American Express Co. - are also coping with legislation enacted earlier this year that includes restrictions on rate increases, which will bite into income.

Card-issuer-turned-bank Capital One said charge-offs in its credit-card business fell to 9.48% in May from 9.68% in April, according to a filing with the Securities and Exchange Commission. Borrowers at least a month behind on their credit-card payments fell to 4.8% from 5.07% during the same period, Capital One said.

The charge-off rate reported by Capital One and its peers is annualized. In addition, this rate may be magnified because losses are spread over a smaller portfolio as card issuers have whittled down the size of their credit-card loans.

Discover said charge-offs in May totaled 8.82% of credit-card loans that have been packaged into bonds, up from 8.42% in April. The 30-day delinquency rate fell to 4.95% from 5.20% in April. Discover and its bigger rival, American Express, both issue credit cards and process transactions.

JPMorgan Chase wrote off 8.95% of card loans in May, down from 9.03% in April. The total number of borrowers who have fallen behind their payments fell to 4.22% from 4.40% in the same period.

American Express, Bank of America and Citigroup will report its monthly card loans performance, including those packaged into bonds, later Tuesday.

Shares of Capital One recently traded at $41.69, up 3.04%%; Discover stock was at $13.68, up 2.09%; and JPMorgan Chase stock was at $37.50, up 0.46%.

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