The average U.S. bankcard charge-off rate in December declined 144 basis points to 6.73% from 8.17% a year earlier, according to data Standard & Poor’s Ratings Group and ExperianPLC released Jan. 18.
Charge-off rates varied widely in different regions.
Bankcard accounts in the Miami area in December generated the highest average charge-off rate among regions measured, at 12.58%, down 165 basis points from 14.23% a year earlier. The Dallas area ended the year with the lowest average charge-off rate at 5.8%, down 100 basis points from 6.8%.
The charge-off rate on bankcards in the Los Angeles area in December was 8.82%, down 174 basis points from 10.56%. The Chicago area’s bankcard charge-off rate was 7.71%, down 195 basis points from 9.66%, while in the New York area, the bankcard charge-off rate was 6.13%, down 19 basis points from 6.32%.
“Nationally, consumers continue to improve their financial condition,” David M. Blitzer, managing director and chairman of the S&P/Experian Consumer Credit Default Indices, said in a press release.
Recent Federal Reserve data show that overall bankcard outstandings declined in November and December compared with a year earlier, Blitzer noted in the release. “Debt-service ratios–the proportion of disposable income that goes to paying debt–continues to decline,” he said.
What do you think about this? Send us your feedback.
