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After setting a record high in August, the U.S. credit card charge-off rate fell below 11% last month, according to Moody's Credit Card Indices. The September charge-off rate decreased to 10.72% of annualized prime credit card receivables from 11.49% a month earlier. Last month's rate, however, is up 409 basis points from 6.63% a year ago. Despite the month-to-month decrease, Moody's still expects charge-offs to peak in mid-2010 at 12% to 13%. The delinquency rate for cards at least 30 days past due increased 119 basis points, to 5.97% of outstanding receivables from 4.78% a year earlier. Last month's rate is 17 basis points higher than 5.8% reported in August. "The increase we saw in the delinquency rate shows the industry has entered a seasonal period of generally higher delinquencies," says Will Black, Moody's senior vice president. "Even though the total delinquency rate had improved throughout the summer, it still remains a full percentage point higher than year-ago levels."

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