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Credit Card Chargeoffs Still Troubling
Blog Post Date: Feb 21 2010
Credit Card Charge-Offs Still Troubling
February 17, 2010 by Staff
Credit card charge-offs – or loans assumed uncollectible and written off – edged higher in January as reported by the major card issuers, although there is some positive expectation in the stabilizing of delinquency rates.
Delinquencies are the accounts running 30-days late . It is generally a precursor of bad loans to come. Several major card issuers either reported modest decline or little change in the delinquency rates for January compared with December.
But for now, the credit card issuers are stuck in write-offs as they face the possibility of reduced revenues from landmark restrictions on interest rate hikes and some charges taking effect on Monday.
The top general-purpose card issuer, JPMorgan Chase, said it wrote off 10.91% of credit-card loans last month, up from 7.11% in December. Chase reported last month that it forecasted a jump in write-offs based on a “payment holiday” offered to customers in the first half of 2009, which pushed defaults in the 4th quarter down – and now are bouncing back up.
Citigroup wrote off 9.8%, up from 9.56% in December. Bank of America again had the highest write-off rate with 13.25% in January, but it was lower than its December rate of 13.53%.
Capital One said charge-offs in its household credit-card unit climbed to 10.41% in January from 10.14% the previous month.
American Express, typically the most common card used for purchases, still holds the most robust outlook among its competitors with a 7% write-off rate, compared to 7.1% in December.
Discover declared charge-offs in January at 8.58% of credit-card loans, down from 8.68% the previous month.
VIA eCredit Daily
Keyword: Credit Card
February 17, 2010 by Staff
Credit card charge-offs – or loans assumed uncollectible and written off – edged higher in January as reported by the major card issuers, although there is some positive expectation in the stabilizing of delinquency rates.
Delinquencies are the accounts running 30-days late . It is generally a precursor of bad loans to come. Several major card issuers either reported modest decline or little change in the delinquency rates for January compared with December.
But for now, the credit card issuers are stuck in write-offs as they face the possibility of reduced revenues from landmark restrictions on interest rate hikes and some charges taking effect on Monday.
The top general-purpose card issuer, JPMorgan Chase, said it wrote off 10.91% of credit-card loans last month, up from 7.11% in December. Chase reported last month that it forecasted a jump in write-offs based on a “payment holiday” offered to customers in the first half of 2009, which pushed defaults in the 4th quarter down – and now are bouncing back up.
Citigroup wrote off 9.8%, up from 9.56% in December. Bank of America again had the highest write-off rate with 13.25% in January, but it was lower than its December rate of 13.53%.
Capital One said charge-offs in its household credit-card unit climbed to 10.41% in January from 10.14% the previous month.
American Express, typically the most common card used for purchases, still holds the most robust outlook among its competitors with a 7% write-off rate, compared to 7.1% in December.
Discover declared charge-offs in January at 8.58% of credit-card loans, down from 8.68% the previous month.
VIA eCredit Daily
Keyword: Credit Card
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