Mon Aug 23, 2004

NEW YORK, Aug 23 (Reuters) - Americans paid their credit card bills on time at a record high level in June, sending credit card delinquencies to their lowest level in four years, Moody's Investors Service said on Monday.

Moody's credit card delinquency index, which measures credit card bills 30 days or more past due, fell to 4.37 percent in June from 5.12 percent a year earlier.

June marked the 11th consecutive month of declines in delinquencies and was the lowest since June 2000, the rating agency said.

The delinquency rate fell to 4.43 percent for the second quarter, down from 5.2 percent a year earlier.

Credit cardholders paid back on average 16.81 percent of their credit card debt, a record high and well above the year-ago 15.2 percent, Moody's said.

For the second quarter, credit card payment rates rose to 16.46 percent, up from 15.02 percent a year earlier.

The ongoing decline in credit card delinquencies suggested that U.S. consumers are not struggling to meet their debt obligations, Moody's said.

"The sustained improvement in the payment rate and the delinquency rate over the past year, in addition to the strong performance of the cardholder loss rate since late 2003, confirms the well-entrenched cycle of improving performance in the credit card sector," William Black, Moody's senior credit officer, said in a statement.

Lower delinquencies and higher payments also spelled fewer losses for credit card companies, according to Moody's.

Moody's charge-off index, a gauge of bad debt that credit card companies write off, slipped to 6.41 percent in June, from 6.87 percent a year earlier.

The charge-off rate was at 6.58 percent for the second quarter, down from 6.97 percent for the same quarter in 2003.

Moody's derived its credit card measures based on $400 billion of U.S. credit card receivables, which have been packaged into bonds or asset-backed securities.

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