Payment rates improved for ABS, which has consistently posted performance improvements, while yield and excess spread fell off. Credit card chargeoffs are now at a six-year low, falling from 4.18 percent to 3.88 percent. Last year, chargeoffs improved at a rate 26 percent lower.
Late payments also declined to 1.61 percent, the lowest level since Fitch launched its Prime Credit Card Chargeoff Index in 1991, which has contributed to a 65 percent decline below 2009 peak levels in late stage delinquencies.
During the January collection period, performance of gross yield decreased by 1.16 percent to reach 17.35 percent, and three-month average excess fell 24 basis points after increasing for nine consecutive months prior. Excess spread is at 11.40 percent from an all-time high of 11.65 percent, but despite the January decline, excess spread levels are nearly double their long-term average of six percent.
Fitch Ratings’ Prime Credit Card Index tracks more than $110 billion of prime credit card ABS that is backed by nearly $260 billion in principal receivables. The index is primarily comprised by portfolios originated by Bank of America, Citibank, JPMorgan Chase, Capital One, Discover and others.