Late payments on credit cards in the U.S. fell in May because most users decided to catch up with the payment of its debts, although still fragile economic recovery.
The fall in arrears for the fifth consecutive month anticipates a decline in bad debt portfolio in the coming months.
Capital One Financial Corp, Discover Financial Services, JPMorgan Chase & Co, American Express Co. and Bank of America reported Tuesday that its delinquency rate fell to the lowest level of 2010.
The credit card losses have declined from highs last year, which has helped banks to write-than-expected earnings in the first quarter.
Americans reduced their debt by 1.7 percent in 2009, its worst decline in decades, and have continued to cut its debt to an annual rate of 2.4 percent in the first quarter of 2010.
However, the high unemployment of 10 percent means that credit losses will remain high in the largest lenders in comparison with historical levels.
Even if credit losses continue to improve, the industry revenue credit card would be hit by new laws and regulations.
American Express continued to lead the recovery of the sector, to report that only 2.9 percent of its customers was delayed more than 30 days in the payment card in May, compared with 3.1 percent in April.
Meanwhile, the rate of bad loans fell to 6.3 percent from 6.7 percent.
Capital One said in a filing with regulators that the rate of bad loans fell to 9.48 percent in May from 9.68 percent in April.
But its NPL ratio declined to 4.80 percent from 5.07 percent.
The biggest bank by assets in the United States by assets, Bank of America, said the delinquency rate fell in May to 6.39 percent from 6.73 in April. However, the percentage of bad loans rose to 13.33 percent from 12.71 percent in April.
Meanwhile, the delinquency rate of Discover fell to 4.95 percent in May from 5.2 percent in April. However, nonperforming loans, after two months of declines, rose to 8.82 percent from 8.42 percent.
For its part, the default rate of JPMorgan fell to 4.22 percent in May from 4.4 percent in April. The rate of bank nonperforming loans fell to 8.95 percent from 9.03 percent.
Citigroup reported that their rate of bad loans fell to 11.16 percent in May from 11.23 percent in April, while the delinquency rate fell to 5.59 percent from 5.85 percent.