Issuer writes off less credit card debt in second quarter

At a time when many credit card issuers are writing off credit card debt as uncollectable with greater volume, one company that oversees credit cards for several major retailers actually saw charge offs decrease.

Alliance Data Systems, which controls accounts for retail chains like Victoria’s Secret, Ann Taylor and Pottery Barn, said that the rate at which they have written off accounts as irretrievable in the second quarter dropped to 9 percent. For the same period last year, that rate was 9.8 percent, and it was 9.4 percent in the first quarter of this year.

That drop was paced by a strong June, Alliance said. The company’s writeoff rate for the month dropped from 9.6 percent in May to 8.8 percent.

The company also said that delinquency rates have declined this year, from 5.9 percent for the first six months of 2009 to 5.4 percent for the same period of 2010.

Many credit card companies have also reported drops in delinquency rates in recent weeks, but because they have seen steadily increasing charge off rates.