American Express wrote off 4.4% of its balances in November, down from 4.7% in October; rate of late payments falls to 2010 low of 2.2%
DES MOINES, Iowa
December 15, 2010
– American Express Co. on Wednesday said the rate at which it wrote off credit card balances as uncollectible in November fell from October and fewer customers were late on their bills.
The New York-based company said it wrote off 4.4 percent of balances for the month, down from 4.7 percent in October. American Express, which has a more affluent customer base than most card companies, reported a peak charge-off rate of 10.2 percent in August 2009, months before other card companies saw the height of their customers' problems paying bills.
Card issuers typically charge-off balances that are 180 days past due, the point at which they are deemed uncollectible.
American Express said its rate of payments that were late by 30 days or more dropped to 2.2 percent in November, down slightly from the 2.3 percent in October. That was the lowest delinquency rate Amex has reported all year. Late payments topped out at 5.3 percent in February 2009.
Consumers' credit card debt has been falling for past two years. Federal Reserve statistics show that total revolving balances for consumer credit, which is mainly credit cards, dropped in September to their lowest point since May 2005, after peaking in 2008. Balances continued to decline in October.
That reflects a combination of factors, including consumers intentionally reducing their balances, credit card companies cutting customers' available credit lines and the record amounts written off by banks in the past three years. Industrywide, the charge-off rate peaked in the second quarter of this year at 10.66 percent of balances. In the two years prior to the recession, it averaged 3.82 percent, Fed data show.
In afternoon trading, American Express share rose 4 cents to $46.24 in afternoon trading. The stock has traded between $36.60 and $49.19 in the past 52 weeks.
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