American Express reports lower net charge-offs in April; 30-day delinquencies also fall

American Express charge-off rate slips in April

NEW YORK — American Express Co. said Monday it wrote off fewer loans in April, and late payments also fell.

The New York-based credit and charge card company said in a regulatory filing that its net charge-off rate was 6.7 percent. That compares with a March rate of 7.5 percent, and 7.4 percent in February.

Lenders write off loans once they’re 180 days past due, under the assumption that the balances won’t be paid.

In the past year, the credit card industry has written off a record amount of loans as customers struggled to pay off debt. The charge-off rate dipped slightly to 9.5 percent in the fourth quarter of 2009, according to the Federal Reserve, down from a high of 10.17 percent in the third quarter. That compares with a rate of 3.8 percent in the second quarter of 2007, before the recession began.

Problems appear to be easing, however, as the economy stabilizes and lenders get bad loans off their books.

American Express said its 30-day past-due rate, an early indicator of potential default, slipped to 3.1 percent in April from 3.3 percent in March, and 3.6 percent in February.

Some observers have also attributed credit card regulatory reform that took effect in February with making it easier for consumers to pay their bills.

American Express said it had $48.9 billion in loans in April, down a fraction from $49.2 billion in March.

In midday trading, American Express shares dipped 51 cents to $40.13.