* Default rates rise, but deterioration slows

* AmEx data suggest ability to pay bills improves

* AmEx shares rise close to 12 percent

By Juan Lagorio

NEW YORK, April 15 (Reuters) - U.S. credit card defaults rose in March to new record highs, as more Americans lost their jobs, but American Express Co (AXP.N: Quote, Profile, Research) surprised investors with data suggesting the ability of cardholders to pay bills could be stabilizing, sending shares up across the industry.

AmEx, the largest U.S. charge card operator by sales volume, said its annualized net charge-off rate -- debts companies believe they will never be able to collect -- rose to 8.80 percent in March from 8.60 percent in February.

But the rate for loans at least 30 days delinquent -- an indicator of future defaults -- decreased to 5.1 percent from 5.3 percent, sending American Express shares up almost 12 percent to $20.62.

"That's a good sign shorter term," said Robert Lutts, president and chief investment officer of Cabot Money Management. "It's anticipating better times ahead ... We may not be completely out of the woods, but certainly the data ... is encouraging."

After calendar adjustments, Capital One Financial Corp (COF.N: Quote, Profile, Research) said the U.S. card charge-off rate rose to 9.00 percent in March from 8.38 percent in February, but also reported its delinquency rate was unchanged at 5.07 percent. Its shares wiped out losses and ended up 1.46 percent.