It was a bumpy summer for credit card issuers, but most of the top banks reported that their customers continued to make their payments on time.
Default rates were down at four of the six largest credit card issuers, which reported their August results in regulatory filings this week. Citibank and Capital One Financial Corp. had upticks in the rate of write-offs of uncollectible balances.
Capital One also posted a slight increase in its rate of payments late by 30 days or more, which is considered an indicator of future default.
Discover Financial Services, American Express, Chase and Bank of America reported continued declines in both rates.
With the increase in August in its default rate to 6.92 percent of balances on an annualized basis, Citibank overtook Bank of America as the issuer with the highest rate. Bank of America reported a 6.79 percent rate.
Monthly fluctuations are generally seen as statistical blips. The results were similar in July, with a few banks reporting slight increases but most reporting improvements in defaults, or charge-offs, and delinquencies.
Overall, both defaults and delinquencies have dropped sharply since hitting their peaks. Late payments, in particularly, are now at historically low points.
Charge-off rates for cards peaked in the second quarter of 2010 at 10.96 percent, according to Fed data, and were down to 5.6 percent in the latest second quarter. Monthly data from most card issuers has shown continued declines, which will be reflected in third-quarter figures. Industrywide delinquency rates were down to 3.62 percent in the second quarter, after peaking in the second quarter of 2009 at 6.76 percent.
One reason consumers are able to keep up with their payments is that balances have dropped sharply since the height of the recession. Lower balances translate to lower minimum payments.
The Federal Reserve said total revolving credit balances, which are mostly credit cards, dropped at an annual rate of 5.25 percent in July, to $792.5 billion. That's down 21 percent since the peak in 2008 of $957.5 billion. The drop reflects both an effort on the part of card users to pay down debt and the amount that banks have written off as uncollectible, which Moody's Investor Services estimates at more than $75 billion since 2009.
Reforms passed in 2009 are also helping consumers, industry watchers have said. Limiting the fees that banks can tack on and the speed at which they can raise interest rates has helped consumers reduce their balances.
Analysts expect rates to remain low, even while individual banks might see blips along the way.
"It's tough to say there's going to be further improvement, just because there's been so much improvement up to this point," said Cynthia Ullrich, an analyst with Fitch Ratings.