Consumer Payment Card News

Stiffing Credit Card Issuers Up a Pinch in Wake of a Peppy U.S. Economy

The number of Americans stiffing credit card Issuers has been slowly growing but confounds economists. While the number of consumers more than 30 days past due (or delinquent) on credit credits has been rising, the number of consumers more than 180 days past-due (the point where credit card issuers write the account off as a loss, or a charge-off), is concerning to banks.

Credit Card Charge-Offs Rising

The latest S&P/Experian Consumer Credit Default Indices for December reveals the auto default rate rose from 0.93% to 1.03%. The December numbers also shows the bank card default rate rose from 3.25% to 3.34% and the first mortgage default rate increased from 0.64% to 0.67%.

According to the Federal Reserve Bank of New York reported 3.6% of auto loan balances were 90 or more days delinquent.

Overall, consumer credit in the U.S. is currently under control, according to CardData.

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

Credit card charge-offs, seasonally adjusted (SA), among the top 100 U.S. banks for the fourth quarter (4Q/18) edged down seven basis points (bps) from the prior quarter, and up two bps year-on-year (YOY).

On a not seasonally adjusted basis (NSA), the charge-off rate among the top 100 U.S. banks for 4Q/18, rose 11 bps from the prior quarter and down seven bps YOY.

Compared to two years ago, the SA charge-off ratio is up 17 bps, and the NSA charge-off ratio is up nine bps.

According to the Federal Reserve, the top 100 U.S. banks posted a SA charge-off rate of 3.52% for 4Q/18, compared to 3.59% in 3Q/18, and 3.50% for 4Q/17. For 4Q/16 the SA charge-off rate stood at 3.35%.

On a NSA basis the top 100 U.S. banks posted a charge-off ratio of 3.50% for 4Q/18, compared to 3.39% in 3Q/18, and 3.57% for 4Q/17. For 4Q/16 the NSA charge-off rate stood at 3.41%.

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

Credit card U.S. charge-offs among the nation’s big 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, based on data gathered by CardData.

The fourth quarter ratio is the highest among the Big 6 issuers since the fourth quarter 2015, increasing 64 bps, and up 40 bps compared to 4Q/16, according to analysis by RAM Research.

Top 100 Banks Credit Card Charge-Offs (Seasonally Adjusted)

4Q/14: 3.00%
4Q/15: 2.91%
4Q/16: 3.35%
4Q/17: 3.50%
4Q/18: 3.52%

Top 100 Banks Credit Card Charge-Offs (Not Seasonally Adjusted)

4Q/14: 2.97%
4Q/15: 2.89%
4Q/16: 3.41%
4Q/17: 3.57%
4Q/18: 3.50%

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

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

4Q/14: 2.90%
4Q/15: 2.67%
4Q/16: 2.91%
4Q/17: 3.25%
4Q/18: 3.31%

Additional Current & Historical Quarterly Data for Big 6 Issuer Charge-Offs

Source: Federal Reserve; RAM Research; CardData