June 01, 2010
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News: CC Delinquencies Continue Trend Down
Recent financial postings by the nation's top credit card companies indicate that cardholders are struggling less with paying their bills. JPMorgan Chase & Co.(JPM), Bank of America Corp. (BAC), Capital One Financial Corp. (COF), Citigroup Inc. (C), Discover Financial Services (DFS), and American Express Co. (AXP) report that although credit card defaults remain elevated, delinquencies have slowed down. Lower delinquency rates are important because they are an indicator of future credit card defaults. According to the most recent filings with the U.S. Securities and Exchange Commission, American Express continues to experience the lowest rate of card delinquency rate with 3.1 percent of the company's cardholders running 30 days or more late. Although Bank of America's card delinquencies decreased in April, the bank continues to be at the top of the U.S. card companies list with the highest delinquency rate of 6.73 percent in April down from 7.07 percent in March. Good news for the nation, as credit worthy cardholders will begin to see increased competition between banks with new balance transfer and interest rate promotions.
Capital One, Discover, Chase, Capital One, and American Express all experienced a decline in credit card defaults in April. American Express performed the best of the top U.S. card issuer as write-offs dropped to 6.7 percent in April, down from 7.5 percent in March. On the other hand, Bank of American was the only bank in the nation's top five that reported an increase in credit card defaults for April. Not only did the company of the increase in write-offs, Bank of America also reported the highest default rate in card defaults at 12.71 percent in April compared to 12.54 percent in March.
Analysts believe that the worst is behind us and the increased credit card companies promotion will spur cardholders to increase spending. As the U.S. begins to pull out of the recession, increased spending is essential if the economy is to continue growing. Increased spending and credit availability is also plays a critical role in reducing the nation's high unemployment rate.