The encouraging employment numbers along with increased retail sales and consumer spending have helped to offset lackluster GDP results for last quarter and contribute to solid credit card ABS performance. Retail sales rose 1.1% in March while consumer spending increased 0.9% . All indications still point to U.S. credit card ABS performance staying in record territory for the near term.
Fitch's Prime Credit Card Chargeoff Index increased slightly for the March collection period after declining for the past two months, now at 3.04%. The index has declined 24% year-over-year (YOY) and is now 74% below its historic high of 11.52% reached in
Fitch's Prime Credit Card 60+ Day Delinquency Index fell six basis points (bps) to 1.17% in March after increasing for two straight months. The decline marks a milestone for the index, now at its lowest level since its launch in 1991. The index has declined 24.5% YOY and stands 74% below its peak level reached at the end of 2009. This metric indicates the percentage of balances with borrowers who have missed two or more payments.
After a seasonal decline last month, Fitch's Monthly Payment Rate Index bounced back up to 26.71% in March. This index is now 9% higher YOY though well above its historical average of 17.15%. Similarly, Fitch's Prime Gross Yield Index increased 74 bps MOM to 19.04% and is also above its historical average of 18.68%.
The health of prime credit card trusts is further evident in Fitch's Prime Three-Month Average Excess Spread Index, which advanced 14 bps MOM to 13.03% (16 bps off the index's all-time high). This index has now increased 13% YOY and now stands at over twice its lifetime average of 6.46%.
Fitch's Prime Credit Card Index was established in 1991 and tracks over
While Fitch's prime credit card indices continued positive trends on average, retail performance was mixed. Fitch's retail credit card indices registered positive momentum in excess spread and delinquencies, while gross yield and MPR were lower. Retails charge-offs remained flat MOM.
Fitch's Retail Credit Card 60+ Day Delinquency Index decreased by 29 bps MOM to 2.46%, a 10.5% increase, while Fitch's Retail Credit Card Chargeoff Index remained flat at 6.65%. The charge-off index remains 50% lower than its peak of 13.41% reached in
After hitting a record high the previous month, Fitch's Retail Credit Card Gross Yield Index decreased by 174 bps MOM to 28.39%. Results were comparable for Fitch's Retail Credit Card Monthly Payment Rate Index which also declined by 57 bps MOM to 15.34%. Fitch's Retail Three-Month Average Excess Spread Index increased 99 bps MOM to 18.48%, marking an all-time high for this index since its inception in 2004.
Fitch's Retail Credit Card Indices track more than
Additional information is available at 'www.fitchratings.com'.
Source: Fitch Ratings
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