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Capital One Financial Corp. today said in a U.S. Securities Exchange Commission filing that its charge-off rate on outstanding credit card receivables fell to 9.32% in August from 9.83% in July. But delinquency rates of accounts at least 30 days past due rose to 5.09% from 4.93%. Other major issuers, including Bank of America Corp., could release their August charge-off and delinquency figures today. At least one ratings agency warns that the recent improvement in credit card charge-off rates is a blip. While bankcard issuers' overall charge-off rates declined in July from record highs in June, Standard & Poor's Ratings Services last week said in its U.S. Credit Card Quality Index report that it does not expect charge-off rates to continue declining. Though recent declines in charge-off rates "may reflect the effects of stricter underwriting standards and a more-cautious consumer base, Standard & Poor's expects losses to rise again in the next few months for several reasons," the ratings agency said. The chief reason is continued high U.S. unemployment rates, which correlate closely with charge-off rates. Another reason is that certain issuers' repricing efforts over the past few months may drive a fresh surge in charge-offs. The ratings agency expects charge-off rates to range from 10.5% to 13% for the rest of this year and "remain in this range for the next 12 to 24 months."
