Citigroup Credit-Card Delinquencies Rise

NEW YORK ( TheStreet) -- For credit card issuers including Bank of America ( BAC), Citigroup ( C) and Capital One ( COF), the latest industry report is a mixed bag.

Fewer consumers are significantly late on their credit card payments, but major issuers are still having to write off extremely high portions of their credit card loans, according to February data.

Among major issuers, only Citigroup showed a monthly increase in the delinquency rate, which is the number of credit card consumers who are at least 30 days late in paying their bill. Lower delinquency rates are good for issuers because this indicates they will have to write-off fewer bad loans in the future.

The Federal Reserve last week reported that revolving credit, which is primarily credit card usage, fell for the 16th consecutive month, decreasing at an annual rate of 2.3%. Reasons for the decline include credit card issuers cutting credit limits to reduce the risk of delinquency.

But credit card issuers are still facing challenges. Charge-off rates (actual loan losses) are still very high. Four of the six major issuers wrote off a greater percentage of their credit card loans in February compared with the previous month.

The sheer volume and amount of the charge-offs has been a major concern throughout the credit card industry during the economic downturn. According to R.K. Hammer, credit card charge-offs increased 59% in 2009, accounting for $89 billion in losses for banks in the U.S. Industry-wide, the charge-off rate hit a high of 10.10% in the third quarter, according to the Federal Reserve. The charge-off rate was 3.87% in the third quarter of 2006.
Bill Hardekopf is the chief executive officer of, which compares and rates more than 1,000 credit cards. He is the co-author of "The Credit Card Guidebook."