Citi credit card writedowns fall in May but still lead industry; delinquencies also fall
By APTuesday, June 15, 2010
Citi credit card charge-offs decline in May
NEW YORK — The rate at which Citigroup Inc. wrote off credit card balances for nonpayment edged down in May, but it remained the highest in the industry.
Citi said it charged off 11.16 percent of balances in the month, down from 11.23 percent in April and 11.55 percent in May.
Competitors like Capital One, Discover and JPMorgan Chase reported charge-off rates between 8.92 percent and 9.48 percent.
Card companies write off balances after they’re 180 days past due, the point at which it’s assumed the balances won’t be collected.
In the past year, the industry has written off a record amount of loans as customers struggled to pay. The charge-off rate rose to 10 percent in the first three months of the year, from 9.5 percent in the fourth quarter of 2009, according to the Federal Reserve. That compares with a rate of 3.8 percent in the second quarter of 2007, before the recession began.
In a sign that customers are getting a handle on timely payments, Citi said its rate of credit cards 30 days or more past due dropped to 8.42 percent in May, from 9.02 percent in April and 9.14 percent in March. Competitors reported delinquency rates between 4.2 percent and 4 percent for May.
Shares of Citigroup added 8 cents, or 2 percent, to $3.96 in afternoon trading.
