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Consumers Now Managing Credit Card Accounts Remarkably Well

by Bill Hardekopf

A record number of consumers are paying their credit card bills on time as well as paying a greater percentage of their monthly balance. These were some of the findings from the February data from Fitch Ratings.

The delinquency rate on retail credit card accounts declined in February to 1.61 percent, the lowest level since Fitch began its prime index in 1991. Delinquencies are defined as a credit card account over 60 days late. This February figure is 65 percent below the peak delinquency levels reached at the end of 2009.

Another all-time record was reached on the monthly payment rates (MPR) on credit cards. This figure represents the rate at which cardholders are paying back their balances. In February, this MPR climbed 1.09 percent to 24.83 percent, the highest level since Fitch began tracking this number.

Charge-offs reached a six-year low. A charge-off takes place when an issuer stops trying to collect on a delinquent account. Fitch's Prime Credit Card Chargeoff Index declined from 4.18 percent in January to 3.88 percent in February. In addition, this February charge-off rate is 26 percent lower than February 2012 levels.

Bill Hardekopf is CEO of LowCards.com, a site that simplifies the confusion of shopping for credit cards. It is a free, independent website that helps consumers easily compare credit cards in a variety of categories such as lowest rates, rewards, rebates, balance transfers and lowest introductory rates. It also gives an unbiased ranking and review for each card.

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