Despite another record-setting month for the charge-off rate of prime credit card portfolios, the rate of increase has slowed considerably, according to Fitch's Prime Credit Card Index results covering the June collection period released Friday. Charge-offs on prime credit card portfolios reached 10.79% of outstanding receivables, 35 basis points higher than the previous month's 10.44%. Charge-offs may soon level off, Fitch says. "We typically observe a dip in charge-offs during the third quarter following seasonal declines in delinquencies during the second quarter," Michael Dean, Fitch managing director, said of the index results. "The most encouraging trends at this stage are the deceleration in charge-off increases combined with stabilization in delinquency rates," Dean added. The credit card delinquency rate declined to 4.31%, a difference of 14 basis points from 4.45% the previous month. "Delinquencies remain elevated and continue to hover near record high levels," says Cynthia Ullrich, Fitch senior director. "We do not anticipate charge-offs to recede meaningfully until we see some improvement in unemployment, delinquency and bankruptcy trends."

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