January was an aberration for U.S. credit card securities, according to Fitch Ratings.

The ratings agency said today that chargeoffs and delinquencies on U.S. deals in its indexes resumed their downward trajectory in February.

Fitch’s Prime Credit Card Chargeoff Index declined by 30 basis points, to 3.88%, following a temporary increase in January. Chargeoffs are now at a new low and are down 26% lower from the same period last year.

Late payments (60+ days) also dropped by two basis points, to 1.61%, in February, the lowest level since Fitch launched its prime index in 1991. This improvement has pushed late-stage delinquencies 65% below peak levels reached at the end of 2009.

Of the other major collateral metrics, yield and excess spread declined while payment rates improved in February.

Fitch noted that, aside from January’s performance, prime credit card ABS has consistently improvement since the U.S. economy started pulling out of recession.

Performance of gross yield worsened during the January collection period, decreased 1.16% to 17.35%. Three-month average excess spread dropped 24 basis points after increasing for nine consecutive months prior. Excess spread is now at 11.40%, coming off an all-time record high of 11.64%.

Despite the January decline, excess spread index levels are almost double their long-term average of roughly 6%.

The monthly payment rate jumped 1.09% to 24.83%, its highest level historically.

Fitch's Prime Credit Card index tracks over $110 billion of prime credit card ABS backed by approximately $260 billion of principal receivables. The index is primarily comprised of general purpose portfolios originated by institutions such as Bank of America, Citibank, Chase, Capital One, and Discover.

Performance of Fitch’s Retail Credit Card Index also improved, with both chargeoffs and delinquencies declined. Gross retail chargeoffs dropped 37 basis points to 6.05%, approximately 19% lower than the previous year’s results. Late-stage retail delinquencies increased seven basis points to 2.69%, a 21% improvement on the year.

Similar to the prime index, retail three-month average excess spread decreased after previously breaking a new record last month decreasing 42 bps to 15.24%. This level, however, remains robust as compared to its long term average of roughly 8.5%.

Fitch's Retail Credit Card index tracks more than $27 billion of retail or private label credit card ABS backed by approximately $51 billion of principal receivables. The index is primarily comprised of private label portfolios originated and serviced by Citibank (South Dakota) N.A., GE Money Bank and World Financial Network National Bank. More than 165 retailers are incorporated including Wal-Mart, Sears, Home Depot, Federated, Loews, J.C. Penney, Limited Brands, Best Buy, Lane Bryant and Dillard's, among others. 

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