The number of consumers who were looking to get out of debt increased once again in August, leading one of the nation's top lenders to write off fewer accounts as being uncollectable.
The latest monthly regulatory filing from Discover Financial Services reveals that it saw its credit card charge off rate – the number of accounts 90 days or more behind on payments that are no longer considered collectable – fall to a new all-time low of 3.6 percent of all balances in August, down from July's total of 3.83 percent. Meanwhile, the company also dealt with fewer accounts that went 30 days or more without payments, which now total just 2.49 percent of all balances, less than July's 2.6 percent rate.
The company has seen charge offs decline steadily over the last six months, and the latest round cost the company $50.8 million, the report said.
Typically, changes in the rate of early-stage delinquencies are reflected in those for charged off accounts several months down the line, indicating that the continued improvements in the former will eventually lead to even fewer defaults.