Payment Card News

Card Losses

591 0

Charge-offs among the top ten issuers of VISA and MasterCards increased by nearly 22% during the second quarter of this year compared to second quarter of 2001, driven largely by the rise in sub-prime losses. Providian and Metris/Direct Merchants reported the largest jump in losses, 70% and 38%, respectively. Bank One/First USA and Fleet continued to report decreasing charge-offs over the past twelve months. Discover reported a 26.5% increase in losses for the second quarter compared to the second quarter of last year. For 2Q/02, Discover reported a charge-off rate of 6.30%, compared to 6.49% in the previous quarter, and 4.98% one year ago. For American Express, losses slowed from 6.5% in 1Q/02 to 6.2% in the second quarter. During 2Q/01, American Express experienced a charge-off rate of 5.7%. Among the top ten VISA and MasterCard issuers, the average charge-off rate for the second quarter came in at 7.95%, compared to 6.52% one year ago. If Providian and Metris/Direct Merchants are excluded, the average for the top issuers would be 5.87% for 2Q/02 compared to 5.50% for 2Q/01.

                       TOP TEN VISA/MC ISSUER CHARGE-OFFS
                            2Q/02    1Q/02    2Q/01   ANN CHNG
            1. Citigroup:   6.50%    6.41%    5.51%    +17.9%
            2. MBNA         5.09%    5.00%    4.82%    +5.6%
            3. First USA:   5.62%    5.69%    6.09%    - 7.7%
            4. Chase:       6.42%    5.87%    5.54%    +15.9%
            5. Cap One:     4.36%    4.00%    3.98%    + 9.5%
            6. Providian:   17.53%   15.05%  10.29%    +70.4%
            7. BofA:        5.59%    5.43%    4.94%    +13.2%
            8. Household:   7.54%    7.17%    6.82%    +10.6%
            9. Fleet:       5.81%    5.42%    6.31%    - 7.9%
           10. Dir Merch:  15.00%   13.00%   10.90%   +37.6%
            AVERAGE:        7.95%    7.30%    6.52%   +21.9%
                Source: CardData (www.carddata.com)

Leave A Reply