* BofA credit card default rate fell to 14.25 pct in Sept

* BofA has highest default rate among big credit card cos

* BofA thinks card defaults have peaked

* Will be issuing fewer cards

By Joe Rauch

CHARLOTTE, N.C., Nov 5 (Reuters) - Bank of America Corp's (BAC.N: Quote, Profile, Research) credit card loss rate may have peaked in the third quarter, but it will remain elevated for a "substantial number of quarters," the bank's head of consumer banking said on Thursday.

Bank of America, the largest U.S. bank, has shown the highest credit card loss rate among the biggest lenders, given its high exposure to subprime borrowers. Last month, it posted a $1 billion quarterly loss.

The bank reported its credit card charge-off rate -- loans the bank does not expect to be repaid -- fell to 14.25 percent in September from 14.54 percent in the previous month.

But Bank of America's default rate is still above the 10 percent average of the industry.