Major Credit Card Issuers Report Uptick in Average Charge-Offs in August

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September 16, 2011 3 Responses http://www.insidearm.com/daily/credit-card-accounts-receivable/credit-card-receivables/major-credit-card-issuers-report-uptick-in-average-charge-offs-in-august/

The average net charge-off rate at five of the largest U.S. credit card issuers increased slightly in August, bucking a 12-month trend of declines. The average delinquency rate declined slightly.

In regulatory filings Thursday, Citigroup reported an increase in its monthly net charge-off rate (from 6.64 percent to 6.92 percent), as did JP Morgan Chase (4.35 percent to 4.82 percent) and Capital One (3.51 percent to 3.70 percent). Bank of America and Discover both reported declines in their net charge-off rates in August.


The average charge-off rate among the five issuers ticked up slightly in August to 5.17 percent (see table below).

The increase in August broke a streak of 12 straight months of reported declines in the net credit card charge-off rates at the banks.

Banks report their charge-offs on a net basis, meaning the numbers include collections from external collection agency networks after charge-off. One possible explanation for the increase in August could be lower recovery rates by the banks’ post-charge off networks.

Delinquencies, meanwhile, hit a new average low in August of 3.13 percent. Only Capital One reported an increase in August (moving from 3.31 percent to 3.32 percent). Bank of America’s 30+ day delinquency rate slipped below 4 percent for the first time in two years. All five issuers now report delinquency rates below 4 percent.

Credit Card Net Charge-off Rates

Charge-Offs (%) B of A Citi Chase Cap One Discover Average
2010-04 April 12.71 11.23 9.22 9.08 8.42 10.13
2010-05 May 13.33 11.16 9.35 8.89 8.82 10.31
2010-06 June 11.98 11.46 8.32 8.41 8.00 9.63
2010-07 July 11.39 9.75 7.88 7.43 7.28 8.75
2010-08 Aug. 11.73 11.18 8.93 7.77 7.98 9.52
2010-09 Sept. 9.99 8.99 8.05 7.89 7.15 8.41
2010-10 Oct. 10.15 10.27 7.26 6.52 6.83 8.21
2010-11 Nov. 9.92 9.40 7.34 7.00 6.72 8.08
2010-12 Dec. 9.31 8.34 7.10 6.21 5.94 7.38
2011-01 Jan. 9.20 7.49 6.44 5.97 5.75 6.97
2011-02 Feb. 8.85 7.95 6.18 5.18 5.79 6.79
2011-03 March 8.18 7.89 6.57 4.99 5.18 6.56
2011-04 April 8.25 7.85 6.11 4.65 5.02 6.38
2011-05 May 8.03 7.81 6.07 4.46 4.82 6.24
2011-06 June 6.97 6.47 4.83 3.94 4.04 5.25
2011-07 July 7.43 6.64 4.35 3.51 3.83 5.15
2011-08 Aug. 6.79 6.92 4.82 3.70 3.60 5.17

Credit Card Delinquency Rates

Delinquencies (%) B of A Citi Cap One Discover Chase Average
2010-04 April 6.73 5.85 5.55 5.20 4.58 5.58
2010-05 May 6.39 5.59 5.29 4.95 4.38 5.32
2010-06 June 6.16 5.44 5.16 4.81 4.30 5.17
2010-07 July 5.92 5.30 5.04 4.72 4.25 5.05
2010-08 Aug. 5.68 4.95 4.90 4.47 4.02 4.80
2010-09 Sept. 5.71 4.94 4.74 4.41 3.92 4.74
2010-10 Oct. 5.60 4.74 4.69 4.34 3.91 4.66
2010-11 Nov. 5.47 4.71 4.50 4.15 3.80 4.53
2010-12 Dec. 5.24 4.44 4.18 3.91 3.65 4.28
2011-01 Jan. 5.17 4.35 4.12 3.84 3.54 4.20
2011-02 Feb. 5.09 4.34 3.98 3.70 3.42 4.11
2011-03 March 4.82 4.21 3.65 3.42 3.17 3.85
2011-04 April 4.52 3.88 3.48 3.15 2.95 3.60
2011-05 May 4.28 3.66 3.35 2.88 2.70 3.37
2011-06 June 4.16 3.56 3.31 2.71 2.62 3.27
2011-07 July 4.05 3.39 3.31 2.60 2.62 3.19
2011-08 Aug. 3.96 3.35 3.32 2.49 2.54 3.13
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Posted in Charge-off, Credit Card Issue, Credit Card Receivables, Featured Post .

Continuing the Discussion

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  • avatar John Rousseau says:
    September 16, 2011 at 6:45 pm

    Wow!!!! A surprise to anyone? 12 months ago-hmmmmmmmmmmmmm

    Sales/outstandings/new accounts/credit lines/209 day write-off/ DMM/ Was-Is/hmmmmm

    Moderator edit: Please don’t post self-promotional links in comments.

  • avatar John Rousseau says:
    September 22, 2011 at 4:28 am

    Moderator, I am not self promoting myself but trying to educate those who want to learn their industry.

    My intentions are honorable as the Industry at high levels do not know the MIS needed to manage their receivables.

  • avatar John Rousseau says:
    October 4, 2011 at 7:22 pm

    IS NO READER OF THIS STORY A LITTLE INTERESTED IN MY COMMENTS? I GUESS I WILL GO TO MY GRAVE 1 OF 2 PEOPLE WHO UNDERSTAND THIS; CED BEING THE OTHER.

    COLLECTION GURU

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