With late payments and defaults nearing five- and three-year lows, credit card payment performance is hitting a fever pitch. Charge-offs are down nine basis points in September to 6.32% from 6.41% in August, dropping 5 of the past 6 months. Although 6% has been the average COF rate since the inception of the Fitch index in 1991, it has been closer to 10% since that start of the recession having peaked at 11.52% in September 2009.
The 6.32% COF rate is restoring a a sense of normalcy to the credit card payments index for the first time since 2008. Meanwhile, the Fitch Delinquency Index for September is 2.30%, a 35% drop-off from the year ago period. This metric represents the receivables associated with accounts more than 60 days delinquent expressed as a percentage of total receivables. The index is primarily comprised of general purpose portfolios originated by institutions such as Bank of America , Citibank , Chase ,Capital One and Discover.