Credit card writeoffs decline
NEW YORK — The ability of credit card holders to pay off debt has shown sustained improvement this year, and that trend continued in October, the top US card issuers said yesterday.
Statistics posted by five of the six biggest card companies mainly showed fewer balances being written off as uncollectible, and fewer card customers falling behind on payments.
Four of the six biggest issuers, included the largest, JPMorgan Chase & Co., reported their lowest levels of bad debt and late payments this year.
Bank of America and Citibank, however, reported upticks in the number of loans they gave up trying to collect.
At Bank of America, charge-offs rose to 10.15 percent of balances from 9.98 percent in September. That’s still well below the peak charge-off rate of 13.53 percent the Charlotte, N.C., bank reported last December. Late payments fell to 5.6 percent, from 5.71 percent in September.
Bank of America is the second-largest issuer by outstanding balances, according to the Nilson Report, an industry newsletter.
Citibank, the third-largest issuer, also saw charge-offs rise, to 10.27 percent from 8.99 percent in September. The New York bank attributed 0.9 percent of that increase, or about two-thirds of it, to an account change. Citi’s charge-off rate topped out at 12.14 percent in August 2009.
Importantly, Citi’s delinquency rate fell to its lowest point since October 2008. The bank said 4.74 percent of balances were past due 35 days or more, down from 4.93 percent in September.
The largest drop in charge-offs was reported by Capital One Financial Corp., which said it wrote off 7.26 percent of balances, down from 8.38 percent the prior month. Chase and Discover Financial Services Inc. posted more modest improvements. The charge-off rate at American Express Co. was flat at 4.7 percent, the lowest among the six largest card companies
The historical average for charge-offs is just over 6 percent.