U.S. consumer credit card defaults declined again in January, reaching their lowest levels in more than two years as the economy gradually stabilized and more consumers were able to meet their payment obligations, according to new data from Fitch Ratings Inc. and Standard & Poor’s.
The average charge-off rate on outstanding receivables for large, securitized credit card trusts on Jan. 31 was 8.05%, down 32 basis points from 8.37% at the end of December, Fitch reported on March 11. The decrease marked the fifth consecutive monthly decline in the charge-off rate.
The delinquency rate for accounts at least 30 days past due was 4.1%, down 10 basis points from 4.2% a month earlier, while the delinquency rate for accounts at least 60 days past due was 3.2%, down three basis points from 3.5% at the end of December.
“Charge-offs are at a two-year low, while delinquencies have decreased for 15 straight months now,” Michael Dean, Fitch managing director Michael Dean, said in a press release.
Major lenders, including Bank of America Corp., Capital One Financial Corp., JPMorgan Chase & Co., Citigroup Inc. and Discover Financial Services, each reported monthly improvements in default rates for the second consecutive month, Fitch said.
The charge-off rate on outstanding receivables for private-label retail card accounts at the end of January was 10.64%, down 44 basis points from 11.08% during the previous month. Retail card delinquency rates reached levels “not seen since the beginning of 2009,” Fitch noted in its release.
The delinquency rate on private-label retail card accounts at least 30 days past due was 6.02%, down 12 basis points from 6.14% a month earlier, while the delinquency rate on retail card accounts at least 60 days past due was 4.2%, up two basis points from 4% a month earlier.
Standard & Poor’s on March 11 reported the average charge-off rate at the end of January on outstanding credit card receivables it analyzes was 6.9%, down 50 basis points from 7.4% during the previous month.
The delinquency rate on credit card accounts at least 30 days past due fell six basis points to 4.1% from 4.16% a month earlier, while delinquency rates on accounts at least 90 days past due was flat at 2.2%.
The charge-off rate on retail card outstandings dropped to 9.1%, down 45 basis points from 9.55% in December, according to S&P. The charge-off rate on retail accounts at least 30 days past due rose five basis points to 5.8% from 5.3% a month earlier, while the charge-off rate on retail card accounts at least 90 days past due remained stable at 2.8%.
