Alliance Data Systems Corp.’s private-label credit card portfolio weathered rising charge-offs on an expanding base of receivables over much of the past year, but its performance is beginning to improve along with the economy.
Monthly average receivables for the company’s private-label credit card accounts hit a peak in January at $5.38 billion, a 21.4% increase from $4.43 billion a year earlier.
Monthly average receivables began to decline in February, falling to $4.99 billion in May, a 7.2% decline from the January peak.
Net charge-offs within Alliance Data’s private-label portfolio began to rise in early 2009, marching to a peak of $44.83 million, or 10% of outstanding receivables in January. The charge-offs began to decline in February and fell steadily each month to $37.76 million in May, or 9.1% of outstanding receivables.
Moody’s Investors Service on June 22 pegged the average U.S. consumer credit card charge-off rate at 10.71%.