Credit Card Charge Offs Decline Once Again

For the second month in a row, the number of consumers participating in credit card charge offs has declined, according to the latest report from Moody's.

May's credit card charge offs fell 20 basis points from April to 10.71 percent, Moody's Investors Service Credit Card Indices Report said. This two month improvement is in stark contrast to the first quarter of this year, which saw consistent gains in credit card charge offs.

Moody's analyst Jeff Hibbs said that "our base-case expectation that the unemployment rate will plateau at 10.1 percent in the second half of the year, combined with steady improvement in the delinquency rate and the payment rate throughout the spring, reinforces our view that credit card charge offs have passed their peak levels of this credit cycle."

Charge offs are done when credit card companies believe a customer's balance is uncollectable, Moody's said. May also saw the number of consumers late on their monthly payments go down to 5.26 percent, which is the lowest reported rate since November 2008.

Fewer consumers delinquent on their credit card bills will inevitably lead to less need to seek out credit card debt relief.