NEW YORK (AP) -- The rate at which banks wrote off credit card balances as uncollectable rose slightly in November, Moody's Investors Service said Thursday.
But the credit ratings firm said it continues to expect charge-offs to remain on a downward path overall, with the annualized rate eventually falling below 4 percent by the end of next year as consumers get a better handle on their debts.
U.S. credit card charge-offs rose 17 basis points last month to an annualized rate of 5.38 percent, according to Moody's Credit Card Index. That's more than three percentage points lower than a year earlier.
"The increase in November is not unexpected, as weaker charge-off rate performance during the month is consistent with seasonal patterns," said Jeffrey Hibbs, a Moody's analyst.
The rate of payments that are more than 30 days late remained stable in November, falling 1 basis point from October and hitting an all-time low of 3.03 percent.
The share of payments that are 30 to 59 days late, so-called early-stage delinquencies, was unchanged last month, although five of the six largest trusts posted monthly declines, Moody's said.
The payment rate, which measures the amount of principal cardholders repay, declined to 20.56 percent, remaining near the record high 21.91 percent rate it reached in August.
Moody's said the yield index in November fell eight basis points to 19.21 percent. Yield is the amount of finance charges, fees and other income collected as a percent of total loans.
The excess spread index fell to 11.03 percent in November, down from 11.30 percent in October, but remains "extraordinarily high," Moody's noted.
Excess spread is a proxy for the profitability of a credit card program. It generally represents the yield of a trust, less expenses such as charge-offs, coupon and servicing.
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