The rate at which Americans fell severely behind in paying down their outstanding credit card debt increased in August, marking the first time in four months the national charge off rate rose.
Fitch Ratings recently reported that the national charge off rate spiked to 6.41 percent after months of declines, due largely to problems experienced by major lenders Citi and Bank of America, according to a report from Dow Jones Newswires. That rate was up from the 6.31 percent observed in July, but still 35 percent lower than the one observed during the same month last year. Further, the increase wasn't significant enough to push the rate far from the all-time historical average charge off rate of 6 percent.
Meanwhile, the rate at which consumers fell behind on their accounts by 60 days or more slipped to just 2.15 percent in August, down from July 2.46 percent, the report said. It was the 19th straight month in which delinquency dropped.
Typically, experts view fluctuations in the rate of delinquency to be an indicator of future charge off rates, but sometimes the two factors will move in opposite directions as consumers continue to try to get out of debt.