Five of the six largest credit card lenders posted declines in U.S. card delinquencies in December, helping the overall rate fall to the lowest level since September, reports Moody's Investors Service.
Loans at least 30 days overdue, an indicator of future defaults, dipped to 6.09% last month from 6.2% in November, Moody's said this week. Accounts between 30 days and 59 days delinquent, the earliest gauge of late payments, declined to 1.49% from 1.6%. Writeoffs of uncollectable loans dropped to 10.32% from 10.56%, Moody's said.
All of the six largest card issuers, including Bank of America Corp., Citigroup Inc. and American Express Co., posted declines in December early-stage delinquencies, reports Bloomberg News.
JPMorgan Chase & Co., the nation's biggest card lender, was the only one to report higher overall late loans, because of a "payment holiday" the company offered customers earlier in 2009, Moody's said.
"We believe that the incremental charge-offs attributable to this payment holiday will be most pronounced in January's numbers, increasing the charge-off rate for both Chase and the overall index," Moody's analyst Jeffrey Hibbs said in the report.
The decline in delinquencies was the first since July and the lowest since September's 5.97%. Unemployment could "plateau" at 10.5% by midyear and credit card writeoffs may peak as high as 13% in the first half of 2010, Moody's said. Writeoffs typically track the jobless rate, which held steady at 10% in December.
