With both consumers and issuers skittish about credit use, U.S. credit card delinquencies fell to a near six-year low, with 60+ day delinquencies dropping for the 19th straight month by another 31 basis points (bps) to settle at 2.15%. Subsequently, the delinquency index is now 52% below peak levels of 4.50%, reached 18 months ago, and early stage delinquency also declined 32 bps to 3.02%.
Credit card defaults tacked were up eight bps from July to sit at 6.41%, ending a four-month plummet, while current chargeoff levels are 35% lower since the year ago period and nearing the 6% historical average. Meanwhile, according to Fitch Ratings, chargeoffs improved for the third consecutive month, while breaking below the 9% mark for the first time in nearly three years, having declined 61 bps from the previous month to 8.84% and are 25% lower year over year. Similar to the prime index, 60+ day delinquencies hit its own six month streak as cardholders continue to make more on time payments. Late stage balances held steady and strengthened another three bps to 3.25%.