Fewer consumers are falling behind on their credit cards, according to financial industry analysts at Moody's Investor Service. According to Moody's data, both the rate of delinquency and the charge-off rate fell in March. Delinquency is defined as an account having payments that are more than 30 days late. The charge-off rate measures lenders' practices of writing credit card debt off as uncollectible.

Moody's report indicates that the national delinquency rate on credit cards was 3.79 percent in March, which was down from 4.02 percent in February. Financial industry experts report this is the lowest rate since the financial crisis began in 2008.

Bank of America credit cards have the highest rate of delinquency at 4.82 percent. American Express had the lowest rate of delinquent balances at 1.8 percent.

Charge-off rates also fell in March. In March, banks considered 7.35 percent of balances to be uncollectible, which is down from 7.56 percent in February. Bank of America had the highest charge-off rate at 8.18 percent. American Express had the lowest rate at 3.7 percent. Moody's predicts that the charge-off rate will fall below 7 percent sometime this year. The highest charge-off rate was reported in at 11.5 percent in August 2009.

Consumer payment patterns tend to be cyclical. March is one of the months in which consumers have traditionally used their income tax refunds to pay down their credit card debts. However, these gains may be short lived.

While the lower delinquency and charge-off rates are signs of general improvement in the economy, the rates are still high when compared to historical norms. The relatively high delinquency and charge-off rates demonstrate that many people are still struggling with credit card debt. In fact, the same Moody's report indicates that consumers are using the credit cards more often now. American Express reported a 17 percent increase in the use of its cards in March. Capitol One reported a 14 percent increase.

Source: Business Journal Daily, "Credit Card Delinquency Rate Still Falling," 4/27/2011