NEW YORK — Major credit card companies said their customers’ payment habits continued to improve in February.
The top six card issuers reported lower rates of payments late by a month or more, a positive sign for the industry as it continues to recover from huge write-offs in 2009 and 2010.
The rates are expected to continue to drop, reflecting both a strong effort by consumers to make their payments on time and the removal of chronic late payers, who have seen their credit cut off.
The largest increase in defaults, or charge-offs, was reported by Citibank. The rate at which it wrote off unpaid cards rose to 7.95 percent of balances on an annualized basis last month, up from 7.49 percent in January.
Still, Citi’s charge-off rate is below its peak of 12.14 percent in September 2009, and significantly lower than the double-digit rates for most of last year.
Industrywide, the charge-off rate stood at 7.7 percent in the 2010 fourth quarter, according to the most recent data available from the Federal Reserve. Overall, defaults peaked at 10.97 percent of balances in 2010’s second quarter. In the two years prior to the recession, it averaged 3.82 percent.
Analyst Jeff Hibbs said charge-offs are likely to resume falling, and should continue to drop through the end of the year.