The July charge-off rate for prime credit card portfolios declined, ending five consecutive months of record highs, according to Fitch Ratings' latest credit card industry report.

Charge-offs on prime credit card portfolios decreased to 10.55% in July, 24 basis points lower than the previous month. A basis point is one-hundredth of a percentage point. Fitch's Delinquency Index remained relatively steady in July, decreasing five basis points from the previous month to 4.26%.

Though charge-offs typically increase in the fourth quarter every year, Fitch says it seems less likely this year, as delinquencies have been somewhat stable over the past six months. "The economic situation may have caused some front-loading of losses this year," Cynthia Ullrich, Fitch Ratings senior director, said in the report.

Charge-offs had risen 45% from February through July and they still remain 63% above year-earlier levels, according to Fitch. Late-stage delinquencies, or receivables more than 60 days past due, have held relatively stable albeit near record highs during the same period following a rapid increase over the prior six months that forewarned the charge-off run-up.

"We still need to see some measurable improvement in the delinquency and personal bankruptcy figures and the employment situation overall before charge-offs revert to more historical norms," said Michael Dean, managing director. "For now, we expect charge-offs to moderate at these elevated levels in the coming months."

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