While we may be seeing some signs of improvement in the economy, credit card companies are certainly not getting any benefit from the improvement. September delinquency rates increased at five of the six top credit card companies when compared to August rates, according the LowCards.com CEO Bill Hardekopf.

American Express is the only one of the top six credit card companies not experiencing an increase in delinquency rates. Its rates stayed the same, according to Hardekopf by email interview. "These high delinquency rates could mean that consumers might continue to see rate and fee increases in the coming months, as well as credit limit decreases on their credit card accounts," Hardekopf said.
Bank of America has the highest annualized card write-offs (14.25% in September) and payments at least 30 days overdue (7.53% in September). Bank of America is looking at changes that need to be made in its credit card infrastructure and other ways it can make money. Just last week, Bank of America announced that it is adding an annual fee to select accounts, but those accounts are of people paying off their cards each month. So now those who are good paying customers will help to pay the costs of these defaulting.

"Issuers can't continue losing money. They have to find ways to make up the revenue, even if this angers Congress and consumers," says Hardekopf, who is author of The Credit Card Guidebook. "To make matters worse for issuers, some fees and rate hikes will be prohibited after certain provisions of the CARD Act goes into effect in February. Congress is also considering changes to the interchange fee."

In addition to Bank of America, here are the delinquency rates for the other top credit card companies: Discover was next in line with a September delinquency rate of 5.57% up from 5.35% in August. Citigroup's September default rate was 5.50% up form 5.38% in August. Capital One's September delinquency rate was 5.38% up from 5.09% in August. American Express had the same delinquency rate in both months - 4.10%

There may be a silver lining in these delinquency rates or it could just mean that the banks are delaying taking the of write-offs, which means they'll need to write off the delinquencies in the future instead. Only Capital One wrote off more in September than it did in August. Capital one wrote off 9.77% in September and wrote off 9.32% in August.The other five banks wrote off less in September than they did in August. Bank of America wrote off 14.25% in September and 14.54% in August. Citigroup wrote off 10.15% in September and 12.14% in August. Discover wrote off 8.69% in September and 9.16% in August. American Express wrote off 8.40% in September and 9% in August. JPMorgan Chase had the lowest level of write-offs - 8.12% in September and 8.73% in August.

Clearly, the credit card companies are still feeling the pain of the economic downturn, but I do believe at least part of this pain is self inflicted. By raising interest rates so high, they threw a lot of people over the edge. Sure, people should not have gotten themselves in so deep with credit card debt, but knowing they were there the banks should instead be working with people to help them get their debts paid off.

Credit card companies may finally be getting that message by modifying more credit card accounts. Maybe this reduction we're seeing in write offs relates to the fact that they are trying to work with people so they can pay off their debts rather than jack their rates up to a point that people give up and walk away from the debt.

Lita Epstein has written more than 25 books including The Complete Idiot's Guide to Improving Your Credit Score.

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