* Major U.S. credit card lenders' charge-off rates fall
* Lowest default levels this year as Americans pay debts
* Delinquencies fall, beating some analysts' expectations
* Shares close mixed (Adds Citigroup data and accounting revision, analyst's comment)
By Maria Aspan
NEW YORK, Aug 16 (Reuters) - Fewer Americans fell behind on their credit card payments than expected in July, as consumers coped better with their debt, but the drop in delinquencies to their lowest levels so far this year doesn't suggest a recovery in spending, analysts said.
Lenders including American Express Co (AXP.N), JPMorgan Chase & Co (JPM.N), Bank of America Corp (BAC.N) and Citigroup Inc (C.N) said on Friday they also wrote off fewer bad loans in July. Shares of some major credit card lenders edged higher, while others drifted lower.
"Seasonally, delinquencies do tend to get a little worse in the second half of the year ... so these numbers were definitely better than we were looking for," Credit Suisse analyst Moshe Orenbuch said.
Credit quality usually worsens slightly once consumers stop getting tax refunds around mid-year, because they have less extra money to pay off their debt.
If delinquencies continue to decline despite the seasonal drag, credit card lenders could report lower-than-expected loss rates in the current quarter, Orenbuch said.
Delinquencies, an early warning sign of future losses, have fallen at most lenders since the start of the year. The July decline suggests that U.S. customers are managing their debt despite an uncertain economic recovery and high unemployment.
"It's a positive sign," said Michael Taiano, an analyst at Sandler O'Neill.
But he cautioned that the consumer credit recovery was still incomplete: "Generally things have stabilized and begun to improve, but does it mean that the consumer's raring to go back and spend again? I don't think so."
Jason Arnold, an analyst at RBC Capital Markets, said the improved delinquencies signaled that consumers were continuing to climb out of the recession, despite the economic slowdown.
"We're still seeing some signs of continued improvement on the credit front," he said. "Credit trends are likely to improve in the month ahead."
Charge-offs, or loans written off as uncollectable, also fell across the board. Credit card losses at JPMorgan Chase and Capital One Financial Corp (COF.N) fell to about 8 percent, a big improvement from the over-10 percent rates they posted as recently as January.
Citigroup, American Express, Discover Financial Services (DFS.N) and Bank of America also reported July charge-off rates that fell to their lowest this year.
American Express lends directly to consumers, like other credit card banks. It also processes the transactions for its own cards, and it competes with Visa and MasterCard to process the transactions on other banks' cards.
Credit card losses remain high, especially at Bank of America, which continues to report some of the highest charge-off and delinquency rates of the major U.S. credit card lenders.
But the company's credit card delinquencies fell to their lowest levels this year, of 5.92 percent, from 6.16 percent in June. Bank of America's charge-offs also fell to a new low of 11.39 percent of the portfolio, annualized, from 11.98 percent in June.
Citigroup, which has also reported some of the highest charge-off rates this year, said on Monday that an accounting flaw had slightly inflated those loss rates. The company revised its charge-off rates for 2010 and said its July charge-offs fell to 9.1 percent from a revised June rate of 10.72 percent.
Citigroup's credit card delinquencies also fell to 5.3 percent from 5.44 percent in June.
At the other end of the spectrum, American Express continued to recover faster than other large credit card lenders. The company said delinquencies fell to 2.6 percent in July, from 2.7 percent in June and 3.6 percent in January. Charge-offs fell to 5.5 percent from 5.7 percent in June.
JPMorgan Chase said in a regulatory filing on Monday that its delinquencies fell to 4.06 percent in July from 4.13 percent in June. Charge-offs dropped to 7.95 percent from 8.38 percent.
Discover's credit card delinquencies fell to 4.72 percent in July from 4.81 percent. Charge-offs at the credit card lender and processing network also fell to a new low this year of 7.28 percent from 8 percent in June.
Capital One's U.S. credit card charge-offs continued to decline for the fourth straight month, to 8.13 percent in July from 9.28 percent in June. Its accounts at least 30 days delinquent declined to 4.66 percent from 4.79 percent.
Shares of JPMorgan Chase and Capital One closed slightly higher on Monday, Discover ended unchanged, and Bank of America, Citigroup and American Express fell less than 1 percent. (Reporting by Maria Aspan in New York; Additional reporting by Brenton Cordeiro in Bangalore; Editing by Robert MacMillan, Richard Chang)