Credit Card Delinquencies Hit 23-Month Low: Fitch

Credit cardsCredit card customers more than 60 days late on their payments hit a 23-month low in August, according to Fitch Ratings.
These “late-stage” delinquencies have decreased every month of 2010, compared to each previous month, as consumers seem to be gaining control of their revolving debt.
However, charge-offs, or credit card loans deemed uncollectible, jumped over 10 percent in August after hitting a 16-month low in July, Fitch said.
“With defaults still elevated and unemployment hovering near 10 percent, consumer credit quality measures will remain stressed,” said Fitch Managing Director Michael Dean. “Absent any meaningful improvement to the employment situation, charge-offs will remain high.”
But late-stage delinquencies – a harbinger of charge-offs to come – are trending downward and may soon reach a two-year low.
For the eighth straight month, Fitch’s 60-days delinquency index decreased in August to 3.27 percent.
Early stage delinquencies registered a bigger decline, with credit card holders behind on their payments for 30 days improving to 4.34 percent in August.
This month, every credit card issuer that makes up Fitch’s prime index reported lower delinquency rates, including Bank of America, Chase, Capital One, Citibank and Discover.
Fitch’s Prime Credit Card index was established in 1991. It tracks more than $208 billion of prime credit card ABS ((asset backed securities).

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