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Credit card charge-offs slip at most U.S. companies

By Jonathan Spicer

NEW YORK (Reuters) - U.S. credit card data for December showed some signs that fewer consumers were falling seriously behind in their payments.

Four out of six companies reporting credit card activity for December said charge-offs declined in the month.

Delinquency rates, which portend future credit card defaults, declined at all of the companies except JPMorgan Chase & Co <JPM.N>, according to regulatory filings on Friday.

The data, while not uniform, was a reversal from a general rise in defaults in November.

December was "a point of flux," said Jason Arnold, analyst at RBC Capital Markets. "If there are two more months of improvement across the board then that's starting to bode a lot more favorably for trends, but we suspect that that won't be the case."

"This is one of those transitional months, and we'll likely see in coming months as a result of seasonality some weakness ... before things get better," Arnold added.

JPMorgan, the largest issuer of Visa-branded credit cards, said charge-offs fell to 7.11 percent last month from 8.81 percent in November. Citigroup Inc <C.N>, the leader for MasterCard-branded cards, said charge-offs dropped to 9.56 percent from 10.29 percent over the same period.

American Express Co <AXP.N>, the largest U.S. credit card company by purchase volume, logged its seventh straight monthly decline. Defaults dropped to 7.10 percent in December from 7.60 percent in November, the company said.

Discover Financial Services <DFS.N>, meanwhile, said charge-offs dropped to 8.68 percent from 8.98 percent.

Bank of America Corp <BAC.N> and Capital One Financial Corp <COF.N>, however, reported jumps in December credit card charge-offs -- debts companies believe it will never collect.

Credit card charge-offs and delinquencies usually track U.S. unemployment, which held steady at 10 percent in December. Some 85,000 people lost their jobs last month, rattling previous expectations that the labor market was stabilizing.

Bank of America had the highest default and delinquency rates of the six companies. The biggest U.S. bank said charge-offs rose to 13.53 percent in December from 13.00 percent in November, reversing a 3-month decline.

Capital One said charge-offs for U.S. credit cards rose to 10.14 percent in December from 9.60 percent in November, logging the second-highest rate of the six companies.

However, credit card accounts that were at least 30 days delinquent fell to 5.78 percent from 5.87 percent at Capital One, the third-largest U.S. issuer of Visa-branded credit card and the fifth-largest issuer of MasterCard-branded cards.

Bank of America's credit card delinquencies fell to 7.44 percent last month from 7.69 percent in November. The monthly delinquency rate dropped to 3.70 percent in December from 3.90 percent at American Express, and to 7.44 percent from 7.69 percent at Capital One.

Discover Financial said in a filing its delinquency rate dropped as well, to 5.49 percent last month from 5.65 percent in November.

The declines come after a mixed November, and reverse several monthly increases last year.

However, JPMorgan reported a slight rise in delinquencies, to 4.94 percent from 4.90 percent in November. "That's not boding well for the future here at all," RBC's Arnold said of JPMorgan.

JPMorgan's shares fell 2 percent after the bank reported deep fourth-quarter loan losses, prompting a sell-off in shares of other financial institutions as well.

Shares of the other five companies also slipped amid a broad drop in financial stocks.

(Reporting by Jonathan Spicer; Additional reporting by Dan Wilchins and Chris Kaufman; Editing by Lisa Von Ahn and Richard Chang)

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