Delinquencies and chargeoffs in U.S. credit card securitizations remain at or near record lows in March, according to Fitch Ratings.
After dropping to a six-year low in February, Fitch’s Prime Credit Card Chargeoff Index rose only three basis points, to 3.91%, in March.
Despite the slight increase month-on-month, chargeoffs are down 24.52% since the same period in 2012 and have come down 66% since the peak in 2009.
Fitch’s 60-day plus delinquency index moved up two basis points, to 2.10%. With delinquency and bankruptcy levels still low, credit card chargeoffs are expected to remain low in the coming months before slowly trending higher later this year.
Despite the expectation, credit card ABS ratings are expected to remain stable throughout 2013 given the high levels of protection afforded investors through available credit enhancement and excess spread.
Gross yield bounced back to 18% after dipping to 17.35% last month. The increase in gross yield boosted excess spread which increased by 5.91% from 10.82% to 11.46%.
