The charge-off rate on U.S. credit cards declined last month, along with the rate of card accounts past due, according to a March 26 report from Fitch Group’s Fitch Ratings Inc.

The rate of defaults on credit card outstanding receivables dipped 10 basis points during February, to 11.27% from 11.37% during the previous collection period in January. Credit card accounts at least 60 days past due in February fell six basis points, to 4.44% from 4.5%, while accounts at least 30 days past due also fell six basis points, to 5.66% from 5.72%.

The trends suggest “a possible recovery for charge-offs” later this year, Michael Dean, Fitch managing director, said in a statement. But it is too soon to conclude charge-offs have peaked because recent improvements in the charge-off rate also are partly the result of seasonal fluctuations and card-issuer policy modifications that helped to stave off some defaults, he said.

“U.S. consumer credit quality remains under considerable pressure, although the pace of deterioration has moderated in recent months,” Dean said, noting continued high unemployment rates likely mean charge-offs will “remain elevated.”

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry