Charge-offs remained stable, but relatively high at 7.2%, among credit card-backed securities during July. Delinquencies also remained stable at 5.1%, the same level as one year ago. Yields have appeared to have leveled off in the 17% range, and the payment rate has remained consistent and strong in the 15% to 17% range, according to Standard & Poor’s “Credit Card Quality Index.” The average charge-off rate of 7.2% for June and July 2003 follows a three-month period in which charge-off rates averaged 7.5%, the second highest historical charge-off rates experienced by the master trusts followed by S&P. On a comparative basis, the 7.3% average charge-off rate for 2003 (year-to-date through July) is 30 bps higher than the 2002 average of 7.0%. However, overall charge-off rates have been relatively stable since the March 2002 peak of 7.6%, ranging from 6.5% to 7.5%. The 30-plus delinquency levels have remained relatively stable in the 5% to 5.5% range, and are currently at their lowest levels since July 2002. However, the overall delinquency trend in the 60- and 90-plus buckets continues to rise. Both the 60- and 90-plus delinquency buckets reached historical peaks in May 2003, posting delinquency rates of 4.4% and 2.9%, respectively. While each of the delinquency buckets improved modestly in July, the 5.3%, 4.1%, and 2.5% average delinquency rates (for the 30-, 60-, and 90-plus delinquency buckets, respectively) for 2003 (year-to-date through July), compared to 2002 averages of 5.3%, 3.6%, and 2.0%, respectively.
Credit Card-Backed Securities Performance
Month July 2001 July 2002 July 2003
Yield: 19.9% 18.8% 17.8%
Payment rate : 16.3% 16.1% 16.8%
Charge-offs: 6.6% 6.8% 7.2%
Delinquencies : 5.0% 5.1% 5.1%
Source: Standard & Poor’s Credit Card Quality Index