The charge-off rate for U.S. credit cards fell in May, reflecting strong credit quality of securitized credit-card receivables in the U.S., Moody's Investors Service said.
Charge-offs, or loans on which lenders don't expect they will be able to collect, dropped in May to 4.9% from 5.21% in April.
The rate is at its lowest point since October 2007 and offset a one-month increase in April, when the rate rose due mostly to an increase in charge-offs from the Citibank Inc. (C) trust, Moody's said.
The firm said it forecasts the charge-off rate will continue to decline in coming quarters, to reach 4% by the end of the year.
Delinquencies of more than 30 days also fell to 2.47% in May from 2.59% in April, the fourth consecutive monthly record low.
The payment rate, a gauge of credit-card customers' ability to pay their balances, rose to 22.47% in May from 21.49% in April. With the increase, the payment rate reached a record high, beating the previous peak set in March.
