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The Associated Press September 15, 2011, 6:31PM ET

Citibank credit card defaults rise again in August

Citibank on Thursday said that its credit card default rate rose for the second straight month, even as late payments fell.

The credit card division of Citigroup Inc. said in a regulatory filing that its default, or charge-off rate, rose to 6.92 percent of balances on an annualized basis in August, from 6.64 percent for July, according to a regulatory filing.

The two months of increases followed four months of decline for the default rate, but it is still far below the bank's peak rate of 12.14 percent in August 2009. The increase means Citibank has the highest charge-off rate among the nation's top six credit card issuers, passing Bank of America Corp., which on Thursday reported an August rate of 6.79 percent. Bank of America had held the top spot since October.

Card issuers typically write off balances that are 180 days past due, the point at which they are deemed likely too far behind for customers to be able to pay back.

Citibank also said that its rate of payments late by 35 days or more dropped, to 3.35 percent annualized in August, from 3.39 percent in July. That rate has returned to levels that Citibank has not seen since the Great Recession began in late 2007.

Late payments, or delinquencies, are considered an important figure because they are a predictor of future defaults.

Shares of Citigroup rose $1.20, or 4.4 percent, to close Thursday trading at $28.59.

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