Fitch: U.S. Credit Card Metrics Likely Plateaued in 4th Quarter

After setting new records in most of 2013, credit card ABS collateral performance metrics probably plateaued during the last quarter, Fitch Ratings says. Preliminary results for Fitch's January credit card collateral indices, which reflect the December 2013 collection period, indicate that key metrics may have reached a transition point after testing record levels over the last half. We believe performance metrics will continue in this range for much of 2014 before moderating somewhat in the second half as pools begin to reflect an expected shift in underwriting standards.

Near-term we expect Fitch's Prime Credit Card Indices to remain close to the record levels set in 2013. January's Prime 60+ Day Delinquency Index is projected to decline by the 2% to 4% normally observed at this time of year. Fitch's Prime Credit Card Chargeoff Index is predicted to increase for the second consecutive period. Fitch's Prime Credit Card Gross Yield Index is also anticipated to increase, again consistent with seasonal trends. Fitch's Prime Monthly Payment Rate Index is projected to rise to a new high.

Fitch's Retail Credit Card 60+ Day Delinquency Index, which has increased for the past two quarters, is projected to decline. The Fitch Retail Credit Card Chargeoff Index is likely to increase for the third consecutive period. Fitch's Retail Credit Card Gross Yield Index is likely to decline month-over-month, as is Fitch's Retail Credit Card Monthly Payment Rate Index.

Actual results for Fitch's Prime and Retail Indices will be available in early February.

Additional information is available on www.fitchratings.com.

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article, which may include hyperlinks to companies and current ratings, can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.

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