Consumer Payment Card News

Credit Card Deadbeats Surface Again As Americans Get Giddy

Americans may be slowly taking on more debt than they should and end up struggling and juggling their credit cards, eventually becoming credit card deadbeats. The amount of credit card debt issuers are getting stiffed on is creeping upward, despite a strong economy.

Credit Card Deadbeats Arise Again

Credit card charge-offs, seasonally adjusted (SA), among the top 100 U.S. banks for the third quarter (3Q/18) edged up six basis points (bps) sequentially, and up 8 bps year-on-year (YOY).

On a not seasonally adjusted basis (NSA), the charge-off rate among the top 100 U.S. banks for 3Q/18, dipped 29 bps from the prior quarter and up nine bps YOY.

Compared to two years ago, the SA charge-off ratio is up 47 bps, and the NSA charge-off ratio is up 55 bps.

Top 100 Bank U.S. Credit Card Issuers Charge-Offs

According to the Federal Reserve, the top 100 U.S. banks posted a SA charge-off rate of 3.56% for 3Q/18, compared to 3.50% in 2Q/18, and 3.47% for 3Q/17. For 3Q/16 the SA charge-off rate stood at 3.09%.

On a NSA basis the top 100 U.S. banks posted a charge-off ratio of 3.39% for 3Q/18, compared to 3.68% in 2Q/18, and 3.30% for 3Q/17. For 3Q/16 the NSA charge-off rate stood at 2.84%.

Top 6 Issuers U.S. Credit Card Charge-Offs

Credit card U.S. charge-offs among the nation’s top 6 issuers rose six basis points (bps) year-on-year (YOY) for the fourth quarter (4Q/18), and up six bps sequentially. 

The Big 6 (Chase, Capital One, Bank of America, Citibank, American Express, Discover) reported an aggregate charge-off ratio of 3.31% for 4Q/18, compared to 3.25% for 3Q/18 and 3.25% for 4Q/17, based on data gathered by CardData.

Credit card charge-offs among the nation’s top 6 issuers rose 9 basis points (bps) year-on-year (YOY) to 3.25% for the third quarter (3Q/18), but down 22 bps sequentially.

The fourth quarter ratio is the highest since the fourth quarter 2015, increasing 64 bps, and up 40 bps compared to 4Q/16, according to analysis by RAM Research.

Top 100 U.S. Credit Card Charge-Offs (SA)

3Q/15: 2.96%
3Q/16: 3.09%
3Q/17: 3.47%
3Q/18: 3.56%

CardData Offers Additional Current & Historical Data for Top 100 Issuer Charge-Offs

Top 100 U.S. Credit Card Charge-Offs (NSA)

3Q/15: 2.72%
3Q/16: 2.84%
3Q/17: 3.30%
3Q/18: 3.39%

CardData Offers Additional Current & Historical Data for Top 100 Issuer Charge-Offs

Average Big 6 U.S. Credit Card Charge-Offs

4Q/15: 2.67%
4Q/16: 2.91%
4Q/17: 3.25%
4Q/18: 3.31%

CardData Offers Additional Current & Historical Data for Big Issuer Charge-Offs

Source: Federal Reserve; RAM Research; CardData