Credit Card Charge-Offs and Delinquencies Fall Again

Net charge-off and delinquency rates in December declined again at five major U.S. credit card issuers, according to data filed by the banks this week with the SEC.

Bank of America, Capital One, Chase, Citi and Discover all reported lower chargeoff rates in December 2010 compared to November. December also marked the second-straight month – and the third in four months — that the five largest card issuers reported charge-off rates below 10 percent.

Bank of America led the pack with a net credit card chargeoff rate of 9.31 percent with Discover reporting the lowest rate at 5.94 percent. All of the reported charge-off figures are net of recoveries and adjusted on a monthly basis.

Charge-off rates were volatile over 2010, with large month-to-month fluctuations reported by the banks. But the trend since the first quarter of 2010 has been declining charge-off rates:

Credit card delinquencies, meanwhile, have seen a more straight line trend of declines in the final three quarters of 2010:

For December, Bank of America again reported the highest delinquency rate in its credit card master trust at 5.24 percent with Chase reporting a low figure of 3.65 percent.

A report Tuesday from Experian and S&P corroborates the banks’ date filings. The S&P/Experian Credit Default Indices showed a decline in bank card defaults in December. The index showed an average credit card default rate of 6.73 percent in the month, down 1.77 percent from November.