August 16, 2010
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News: Capital One Credit Card Business Improving
If you hold a Capital One Financial credit card, you are probably paying monthly payments as agreed. According to the most recent regulatory filing by Capital One Financial, the company's credit card defaults have fallen for another month. The bank reported that defaults in July fell to $366.8 million amounting to 8.1 percent of the total outstanding. In its June regulatory filing, Capital One reported total credit card defaults of $422.5 million; 9.3 percent of the total card balances. Card defaults are typically more than 180 days past due and is consumer debt that banks do not expect to recoup payment from cardholders. The international charge-off rate in July was 7.86 percent, down from 8.3 percent in June.
Capital One also reported that cardholders are doing a better job of paying their monthly bills on time. According to the filing, the bank's credit card delinquencies of 30 days or more past due also fell during the month of July to 4.66 percent as compared to June's rate of 4.79 percent and May's of 4.8 percent. Considering that Capital One has a more difficult time than other credit card companies during the recession, the bank remains below the international rate in July of 5394 percent which fell from 6.03 percent in June.
Credit card defaults were not the only category to improve for Capital One, the auto loan category defaults also decreased to 2.6 percent in July from 2.72 percent in June. Auto loan delinquencies also fell slightly to 7.72 percent in July from 7.74 percent in June. Capital One suffered some of the highest default rates in the industry as charge-offs rose to 10.41 percent in January 2010. The bank also received a great deal of criticism as cardholders and lawmakers alike claimed the bank took advantage of sub-prime cardholders with the use of predatory and unfair lending practices.