Consumers Increase Credit Card Debt Repayment

A day after similar announcements from other major lenders, Citibank saw the number of delinquent consumer credit card accounts it wrote off as uncollectable decline in December.

Citibank saw its delinquency rate fall to 8.34 percent in December, its lowest point in nearly two years, and down sharply from the 9.4 percent observed

This was the largest drop seen by the top six U.S. credit card issuers, and the lowest charge off rate Citibank has experienced since the start of 2009, Bloomberg reports. Typically, these charge offs occur on accounts that are more than 180 days late, and the significant drop indicates many more are now meeting their monthly bill requirements.

In addition, the rate at which consumers fell behind on past debt repayments by 35 days or more also decreased to 4.44 percent, falling from 4.71 percent in November, the news source says. This represented the lowest percentage the bank has experienced in more than two years.

Economists say this is a sign charge offs will continue to decrease as expected in 2011, as late payments are traditionally viewed as a signal of future account defaults.