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The Associated Press August 15, 2011, 1:28PM ET

Capital One credit card defaults ease in July

Capital One Financial Corp. on Monday said that the rate at which it wrote-off unpaid credit card balances fell in July, while late payments ticked up slightly.

The bank's U.S. credit card charge-offs, or the balances written off after they were six months late, fell to $169 million, or 3.77 percent of balances on an annualized basis. That was down from $198 million, or 4.41 percent of balances, in June, according to data filed with the Securities and Exchange Commission.

It was the fourth consecutive month the default rate was below 5 percent. The figure peaked at 10.87 percent in March 2010.

The bank, based in McLean, Va., had a less positive report for the rate of late payments in July. That edged up to 3.37 percent of balances on an annualized rate during the month, from 3.33 percent in June.

The bank's late payment, or delinquency, rate has been below 5 percent since May 2010. The statistic is considered an indicator of potential default by customers.

Capital One said the charge-off rate for its international cards in July was 6.59 percent, down from 7.19 percent in June. Late payments on international cards rose to 5.34 percent in July from 5.30 percent in June.

In Capital One's auto loan unit, the charge-off rate rose to 1.79 percent, from 1.58 percent in June. The July auto loan delinquency rate rose to 6.84 percent from 6.51 percent in the prior month.

In afternoon trading, Capital One shares rose $1.56, or about 3.6 percent, to $45.34.

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