Quarterly results released by Fitch Ratings showed chargeoffs and delinquencies fell to historic lows for the third straight quarter, an indication of a strong second half of the year for credit card asset-backed securities.
Three-month average chargeoffs in the second quarter were at 3.87 percent, a 26 percent quarter-over-quarter decrease from 5.23 percent. Delinquencies more than 60 days past due averaged 1.48 percent, compared 1.63 in the second quarter of last year.
Improvement slowed in the second quarter, and the ratings agency said the rest of the year is likely to follow suit. Fitch Ratings Managing Director Michael Dean said credit card losses are close to a “plateau” and will likely start to trend upwards towards the end of the year.
Monthly payment rates rose to an all-time high of 25.3 percent in the second quarter, signaling consumers’ willingness to make on-time payments and pay off their balances.