The average charge-off rate on U.S. consumer credit cards in July fell to a 16-month low, while delinquency rates also were better as credit card-portfolio health continued to improve, Fitch Ratings reported this week.

The average default rate on outstanding credit card receivables in July fell to 9.65%, down 92 basis points from 10.57% in June. Issuers that include Bank of America Corp., Capital One Financial Corp., Citigroup Inc. and Discover Financial Services all had lower default rates on consumer credit card accounts in July, Fitch said.

Delinquencies on accounts at least 60 days past due fell in July to 3.76%, down 10 basis points from 3.86% in June, marking the lowest delinquency rate Fitch has tracked in 19 months. Delinquencies on accounts at least 30 days past due fell to 5%, down 13 basis points from 5.13% in June.

“The trends are encouraging, but card defaults are still elevated historically and will remain so,” Michael Dean, Fitch managing director, said in a statement. “Unemployment will continue to weigh on consumer credit quality throughout the rest of this year and well into 2011.”

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