June 15, 2010
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News: Capital One Credit Card Defaults Down
As consumers wait anxiously to hear how credit card companies have performed under the wake of new card reform and regulations, one of the hardest hit banks has good news. In its monthly regulatory filing, Capital One Financial Corp's (COF) said the bank's annualized net credit card defaults for the month of May fell to 9.48 percent down from 9.68 percent in April. These write-offs are debts that the bank believes it will never collect. Good news for the bank and consumers alike as it indicates economic difficulties are being to ease up. Capital One also had positive results on delinquencies. Credit card delinquencies of 30 days or more past due fell in May to 4.8 percent down from 5.07 percent in April.
Reports on in other areas weren't as positive. Capital One showed the write-off rate for U.S. auto loans increased during May up to 1.87 percent from April's 1.75 percent. Auto loan delinquencies also suffered as the rate grew to 7.75 percent in May up from 7.13 percent in April. The increase could give some creditability to speculation that consumers have become more conscious of paying credit card payments rather than meeting other monthly responsibilities. Experts say it's because consumers are depending on their credit cards to bridge expenses from paycheck to paycheck and can't afford to lose them.
The bank's international card operations also showed encouraging results. Capital One reported international operations, including Canada and Britain, showed a decrease in card defaults to 8.21 percent in May from 8.60 percent in April. International card delinquencies also decreased to 6.08 percent in May from 6.28 percent the previous month. Capital One Financial is a bank holding company that specializes in specializing in credit cards, home loans, auto loans, banking and savings products. They are the third-largest U.S. issuer of Visa branded cards and the fifth largest issuer of MasterCard branded cards. The company's headquarters are in McLean, Virginia.