Moody's: U.S. Credit Card Performance Improves in August

by Mike Bevel, CollectionIndustry.com

Good news for anyone with a credit card in his wallet: credit performance measures tracking about $400 billion of U.S. credit card receivables showed continued improvement in August, according to Moody?s.

The charge-off rate, which began the year at a near all-time low and had increased steadily throughout the year, fell to 4.07 percent in August from 5.53 percent a year ago.

The delinquency rate, which measures the proportion of account balances for which a monthly payment is more than 30 days late as a percent of total balances, fell to 3.59 percent in August from 3.98 percent a year ago. The delinquency rate has improved for the last thirty-seven consecutive months.

“Even more, early stage delinquency rates, which may provide an early indication of a rise in contractual delinquencies, continue to remain below the average levels observed before the new bankruptcy law became effective,” said William Black, senior vice president at Moody’s.