Fitch: Chargeoffs Up Slightly in 1Q for U.S. Credit Card ABS
Credit card chargeoffs rose 12 bps in 1Q'15 to 2.75% from 2.63% in 4Q'14. That said, losses are still roughly 75% below peak levels seen in 2009. 'Credit card delinquencies have been holding steady since last year so chargeoffs are not likely to rise to any great degree in the near term,' said Director Herman Poon.
Despite the slight increase in losses, asset performance remains amazingly stable. Credit card delinquencies are holding steady just above the record 1% threshold. Borrowers are also continuing to pay off their credit card debt in a timely fashion, with the monthly payment rate for January posting a high of 28.65%.
Average quarterly credit card ABS outstandings increased for the ninth consecutive quarter and are now reflective of figures last seen in 2011. Total average receivables balance recorded last quarter rose nearly 19% from figures during the same period in 2014.
The U.S. Credit Card ABS Index is part of Fitch's series of structured finance index reports. The index reports are updated quarterly and are available at 'www.fitchratings.com' or by clicking on the above link.
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