Credit card defaults, delinquencies decline in July

08.19.09
By Lewis Green

It appears that it may be getting easier for some Americans to pay their credit card debt, as many of the major credit card companies reported that their charge-off rates fell slightly in July, with JPMorgan Chase reporting a decline in defaults for the second straight month.

Based on figures the card company filed with the Securities and Exchange Commission, Chase's default rate - the percentage of debt the company does not expect to recover - fell from 8.04 percent in June to 7.92 percent last month.

A number of other credit card issuers, including Bank of America, Discover and Citigroup, have also reported falling default rates and delinquency rates. Nancy Bush, founder of NAB Research, told Reuters that news of Bank of America's delinquency and default rate declines is a good sign for most Americans.

"It just seems to bear out what we heard in the second-quarter calls, that things seem to be getting marginally better - and I would stress marginally - on the consumer side," she told the wire service.

But it's not all good news from the card companies as Capital One said both charge offs and delinquencies rose slightly in July. According to the company, delinquencies - payments that are at least 30 days late - rose from 4.77 percent to 4.82 percent while delinquencies increased to 9.83 percent in July.

The news from most of the major credit card companies comes after American Express announced earlier this month that its default rate had also fallen for the second straight month. Some analysts have said that the decline in American Express' charge-offs has been due to the wealthy background of a large percentage of its customers.

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Default and delinquency rates on dropping for credit card companies