Creditnet News Story
Discover, BoA report delinquency and default rates on credit card accounts
Friday, February 19, 2010
By Sam Lee
Both say defaults declined in January.
Recently, a number of credit card issuers made reports regarding their charge off and delinquency rates.
For example, Discover Financial Services said that defaults on credit card debt dropped from 8.68 percent in December to 8.58 percent in January. The company also reported that though defaults declined, delinquency rates for card accounts more than 30 days late went up from 5.49 to 5.55 percent.
Meanwhile, Bank of America reported that charge offs also declined, falling from 13.53 to 13.25 percent in January. Furthermore, the company said that late payments on cards also declined, falling to 7.35 percent in January after being at 7.44 percent the previous month. That marks the lowest delinquency rate seen by the company in a year.
While lenders continue to deal with defaults and late payments, they have also been gearing up for new rules that take effect on February 22 through the Credit Card Accountability, Responsibility and Disclosure Act, which will affect current accounts and new ones made through credit card offers.
As a result of the regulations, credit card companies will not be allowed to set early morning deadlines for bills and will have to credit payments at branches on the same day they are made.
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