Americans reduce credit card debt in October
Consumers brought charge offs – late payments to credit card lenders, which are not expected to be repaid – to a 19-month low in October.
Charge offs among prime-rated credit card users fell slightly in October, dropping 0.02 percentage points from September’s figures to 9.2 percent.
In addition, the numbers represented a 9 percent year-over-year decrease, according to the latest report from Fitch Ratings. However, the long-term historical average for this statistic is still 5.93 percent.
“Ongoing improvements in delinquency trends indicate card charge offs may recede further in coming months,” said Fitch managing director Michael Dean. “Credit-card portfolio quality will improve further even as unemployment stays elevated.”
Late-stage delinquencies – accounts at least 60 days behind on payments – also fell for the 10th straight month. Delinquencies greater than 30 days were also reduced during this time by 0.1 percentage point, the news source says.
The rating agency said these numbers would have been greater – down to 8.93 percent – however, a change in Citigroup’s write-off policy was sufficient enough to sway the results.