Defaults on credit cards decline

May 19, 2011 at 12:00a.m.

Credit-card defaults and late payments dropped in April, signaling more improvement for the recovering credit-card industry.

Bank of America was the only major credit-card issuer that reported an increased default rate last month.

American Express Co., Citigroup Inc., Capital One Financial Corp., Discover Financial Services and JPMorgan Chase & Co. all saw decreases in defaults and late payments.

“Consumers are leery about putting so much on their credit card, which is what they did when times were great before the crash,” said Bill Hardekopf, CEO of LowCards.com, an independent credit-statistic website. “I think it’s a combination of all those factors.”

All the major card issuers have late-payment rates of below 5 percent; JPMorgan Chase’s is at 2.86 percent, and American Express’ is at 1.7 percent.

Charge-off rates, or balances banks believe they cannot collect, remain somewhat high but have softened, statistics show.

Hardekopf said it was the 18th-consecutive month late-payment rates fell, and the numbers can be attributed to tougher credit limits and tighter approval standards.

Total revolving debt among U.S. consumers was $796 billion in March, the latest available month for the statistics, down $161 billion from the 2008 peak of $957 billion.