Losses on US credit cards edged lower in July as fewer borrowers fell behind on payments or defaulted, breaking five consecutive months of record high losses in the sector, according to Fitch Ratings.

Charge-offs on US credit cards – loans that banks write off as uncollectable – declined 24 basis points to 10.55 per cent in July, compared with June, said Fitch. The rate of late payment has levelled off over the past six months, after increasing rapidly in the previous 12 months. Borrowers also chose to make higher payments on their cards in July than the previous month, said Fitch.