Creditnet News Story

Card companies report delinquency, charge off rates

Wednesday, March 17, 2010

By Danielle Robson

A number of card companies saw their delinquency rates fall in February.

Recent filings with the Securities and Exchange Commission show that companies that make credit card offers may be feeling a little less pressure when it comes to troubled accounts.

For example, Capital One Financial Corp. reported that card accounts that were at least 30 days late on payment dropped from 5.8 to 5.51 percent in February. As the number of delinquencies drop, the prospect that accounts will go into default also decreases.

Regarding charge offs - which are accounts companies no longer expect to get payment on - Capital One reported that the annualized rate declined from 10.41 to 10.19 percent in February.

In its filing with the SEC, Discover Financial said that its delinquency rate declined from 5.55 to 5.5 percent in February. However, the company also reported that its charge off rate increased from 8.58 to 9.11 percent.

Like Discover, Bank of America reported that delinquencies declined while charge offs increased. Accounts that were late on payment fell from 7.35 to 7.23 percent, while charge offs increased from 13.25 to 13.51 percent.

While companies show some stabilization regarding troubled card accounts, a recent report from the Federal Reserve Board showed that revolving consumer credit fell at an annual rate of 2.3 percent during January.