Capital One Financial Corp. (COF) wrote off 9.83% of its card loans last month, compared with 9.73% in June, beating analysts' estimates of higher losses.

In addition, the bank and credit-card issuer said U.S. borrowers at least a month behind their card payments increased to 4.83% in July from 4.77% in June, according to a regulatory filing Monday.

Sanjay Sakhrani, an analyst at Keefe, Bruyette & Woods, said in a note Monday that the amount of card debt that Capital One wrote off in July is "trending better than our estimates." Sakhrani expects card losses for the overall industry to peak in the fourth quarter or early next year.

This monthly report card on the performance of credit-card loans, including those packaged into bonds, comes amid heightened scrutiny around credit as strapped borrowers increasingly fall behind on payments. These reports provide a window into the potential losses facing card issuers and the amount they may need to squirrel away as reserves.

Discover Financial Services (DFS) and American Express Co. (AXP) are also slated to release the performance of their credit card loan portfolio Monday.

Issuers of plastic, including Capital One, JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), Citigroup Inc. (C), Discover Financial and American Express are not only coping with losses stemming from credit-card loans going bad but also sweeping legislation that will bite into income. To fight the losses, card issuers are scaling back on credit and getting tougher on who they lend to.

David Long, an analyst at William Blair & Co., said in a note Monday he expected Capital One to write off 10.05% of its card debt in the third quarter. Long said the company's card loans performance in July was "better than our forecast."

Capital One's credit-quality report shows "normal seasonality in delinquencies and a significantly moderating pace of growth in credit losses," said Craig Maurer, an analyst at Calyon Securities (USA).

Capital One's shares recently traded at $34.84, down 24 cents or 0.68%. The shares closed at $35.08 on Friday.

"Results were a bit better than expected, but it's still not clear we are seeing a turn in credit trends," said Julie Rakes, a company spokeswoman.

-By Aparajita Saha-Bubna, Dow Jones Newswires; 617-654-6729; aparajita.saha-bubna@dowjones.com