Biz Brief: Capital One Charge-Offs Fell in May

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Capital One Financial (COF) said Tuesday the trend it began seeing in 2009 of monthly declines in payment delinquencies continued in May as U.S. credit-card defaults fell, indicating that consumer stress is easing.

Capital One said the annualized net charge-off rate -- debts the company believes it will never collect -- for U.S. credit cards fell to 9.48% in May from 9.68% in April. Similarly, accounts at least 30-days delinquent -- an indicator of future loan losses -- declined to 4.80% from 5.07%. Other charge-offs and delinquencies declined and the case was the same internationally.

Delinquencies and charge-offs help predict potential losses and how much lenders may need to put aside to cover them. Credit-card losses have fallen in recent months, along with delinquency rates and in April, Capital One said it swung to a first-quarter profit as consumers used plastic for more purchases.

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