Nearly all lenders see defaults slip
The rates at which consumers fell behind on their credit card payments fell for almost all major lenders in the U.S. during June.
Five of the nation’s six largest credit card issuers saw defaulted credit card debt decline once again last month, while the same number saw fewer borrowers fall behind on their payments for the first time, according to a report from the Associated Press. Only Citibank has yet to release its monthly charge off and delinquency statistics.
As a result of these healthier numbers, all lenders are reporting better performance from their credit card arms, as far less money has to be set aside for loan loss provisions, the report said. This trend has been ongoing for several months and lenders have seen profits balloon during that time on a year-over-year basis.
Accounts are typically written off by lenders as being uncollectable after 90 days without a payment, and some financial experts caution that continued improvements in the credit landscape are more the result of these actions during the recession rather than a wholesale improvement in consumers’ borrowing habits.