Credit Card Payment Performance Stabilizes

Chargeoff rates on credit card portfolios receded somewhat in June according to Standard and Poor's Credit Card Quality Indexes. The charge-off rate in a pool of approximately $350 billion in credit card receivables (nearly two-thirds of the total U.S. bankcard market) declined to 6.4 percent in June, 2001, a drop of 50 basis points from one month earlier. However, the June 2001 chargeoff rate was 100 basis points higher than the chargeoff rate one year earlier, an indication of how rapidly credit card payment performance has deteriorated. S&P analysts speculated that the reprieve in June may have been due to the deceleration in bankruptcy filings from their torrid pace during March and April. Total delinquencies remained at 4.9 percent of dollars outstanding, the same as the previous month but 80 basis points higher than in June, 2000. The chart below displays year-over-year changes in both the delinquency and charge-off indices maintained by S&P.

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