Americans defaulted on less credit card debt in November than in the previous month, but don't discount further fallout from the recession just yet, credit rating agency Standard & Poor's said Tuesday.

Write-offs of loans in credit card portfolios fell by 0.4 percentage points to 6.3 percent in November, S&P said in a release.

The rating agency's gauge of late credit card payments showed delinquency rates for November at 5.2 percent, steady from the previous month, but 0.4 percentage points higher than a year ago.

But with the economy apparently recovering slowly and unemployment rising, write-offs are likely to increase through mid-2002, and could exceed the 7 percent level, S&P said. A recovery in consumer credit will likely lag the economy as a whole.

The S&P figures refer to credit card loans that have been bundled into portfolios and securitized, which account for about 2/3 of the bank credit card market.


"These numbers may show that the economy may not be as bad as we thought, but we're cautious. It's only one month, and there might be other reasons for the November level," said Bonne Lee Tillen, director in credit card securitization at S&P in New York.

The November numbers may have been elevated because of decreased consumer spending in September and October in the wake of the Sept. 11 attacks. Lower credit card borrowing could have led to lower write-offs in November. Consumers also often spend less ahead of the holidays, which may have also led to lower spending, and writeoffs.

Loss rates have generally been stable to slightly lower since May compared with the first half of 2001, partially due to seasonal patterns, and partially due to bankruptcy reform legislation being put on the back burner Tillen said.

With bankruptcy reform looming, consumers concerned about onerous new laws rushed to file ahead of the legislation passing. As bankruptcy reform became a lower priority after the Sept. 11 attacks, bankruptcy filing decreased, Tillen said.