Credit card delinquency rates fell at major U.S. lenders in November as fewer consumers fell behind on their bill payments, signaling they are recovering from the stress of the financial crisis.

But consumers are also avoiding racking up more debt on their credit cards, even during the holiday shopping season, a sign that lenders will be struggling to rebuild their card businesses for some time to come.

Credit card lenders including Bank of America Corp , JPMorgan Chase & Co and Citigroup Inc said the rate of late payments in November fell to the lowest levels this year.

We thought on a seasonal basis we'd see some weakness, and instead we saw a relatively benign to a very positive picture, analyst Henry Coffey of Sterne, Agee & Leach said. We were more pleased than displeased with the numbers.

Delinquencies are the first sign that consumers are having trouble paying their bills and that lenders may eventually have to write off the debt. The steady decline in delinquencies this year at the top U.S. credit-card lenders signals that American consumers have recovered from the worst of the financial crisis.

Charge-offs offs ticked up slightly at some lenders, including JPMorgan and Capital One Financial Corp , but they were still much lower than at the beginning of the year.

Losses -- and loans -- on credit cards usually rise at the end of the year as consumers splurge during the holiday shopping season.

But consumers are reluctant to take on more debt this year. Only 16.3 percent of consumers used credit cards over the Black Friday weekend -- the start of the holiday shopping season -- down from 30.9 percent last year and an all-time low, according to a survey by America's Research Group and Swiss bank UBS. [ID:nN30280519]

GRADUAL RECOVERY

Lenders file monthly credit-card performance reports with the U.S. Securities and Exchange Commission.

Bank of America had the worst credit card loss rate in November -- 9.92 percent, down from 10.15 percent in October. The largest U.S. consumer bank has recovered somewhat from the beginning of 2010, when charge-offs were more than 13 percent. Its delinquency rate fell to 5.47 percent in November from 5.6 percent in October.

Citigroup's charge-offs dropped to 9.4 percent in November from 10.27 percent in October. Its delinquency rate declined to 4.71 percent from 4.74 percent.

At the other end of the spectrum, American Express Co continued to report the lowest level of charge-offs and delinquencies among the major U.S. lenders.

The credit-card lender and transaction-processing network said its charge-off rate fell to 4.4 percent in November from 4.7 percent in October. Delinquencies fell to 2.2 percent from 2.3 percent.

American Express is increasingly looking to its transaction-processing business for growth and has cut back on lending to all but affluent consumers who mostly pay their bills in full every month.

At JPMorgan, which is increasingly competing with American Express for the most affluent credit-card customers, the delinquency rate fell to 3.68 percent in November from 3.81 percent in October. Its charge-off rate edged up to 7.16 percent from 7 percent.

Like American Express, Discover Financial Services lends directly to consumers but also competes with Visa Inc and MasterCard Inc to process credit card transactions for banks. Discover said delinquencies fell to 4.15 percent in November from 4.34 percent in October. Its charge-offs dropped to 6.72 percent from 6.83 percent.

Capital One said accounts delinquent for at least 30 days fell to 4.26 percent in November from 4.45 percent in October. Its charge-off rate rose to 7.56 percent from 7.26 percent but was still much improved from more than 10 percent in January.

Shares of the six major lenders were mostly lower in Wednesday afternoon trade, with Citi down more than 2 percent at $4.59.

(Editing by Vinu Pilakkott and John Wallace)

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