Creditnet News Story

Drop in charge offs reported for Citicard

Thursday, June 24, 2010

By Danielle Robson

Citicard holders are showing signs that they are better able to manage their credit cards.

Citcard reported a charge off rate of 11.55 percent in May and 11.24 percent in April, says the Associated Press. Currently, the rate stands at 11.16 percent.

While the downward trend is good for Citicard, it still remains higher than other large credit card issuers, whose charge off rates hover close to 9 percent, according to the AP. Most credit card issuers also reported a decline in charge offs, except for Discover.

Citicard also reports that it received fewer late payments last month. The delinquency rate fell from 9.02 percent in April to 8.42 percent in May of this year, reports the AP. Other major credit card issuers reported declines of at least 0.2 percent.

Even though the number of charge offs is dropping, they are still an expense for issuers.

"Companies have been scaling back on credit in the last several months and getting tougher about lending standards," reports the Wall Street Journal. "They are tasked with the balancing act of increasing lending to spur revenue but not loosening standards."

Card companies aren't the only ones who benefit from on-time payments. Making on-time payments will boost a consumer's credit score, increasing their chances of securing a loan or gaining employment.