Average credit card U.S. yield, among the nations’s Top 4 bank card issuers, jumped 16 basis points (bps) sequentially at 12.10% and up 82 bps year-on-year (YOY) for the fourth quarter (4Q/18), compared to 11.94% for the prior quarter, and 11.28% for 4Q/17, according to data gathered by CardData
Credit card yields average jumped among the nations’s Top 4 bank card issuers by 64 basis points (bps) sequentially at 11.94% and up 46 bps year-on-year (YOY) for the third quarter (3Q/18).
The U.S. Top 4 Issuers (Chase, Capital One, Bank of America, Citibank) YOY gains in yield ranged from 45 bps (BofA) to 111 bps (Citibank). CardData notes sub-prime card specialist, Capital One, with 33% of its U.S. credit card portfolio carrying FICO scores of 660 or below, leads the peer group with a yield of 15.58%. Bank of America reported the lowest yield ratio of 10.49% for 4Q/18.
Record High Yield Drivers
According to analysis by RAM Research, this is second quarter ever wherein all top four U.S. issuers posted double-digit yields for their respective U.S. credit card portfolios. The record gains are driven by higher credit card prime rate-based interest rates, as reported by CardTrak, moderate delinquency/charge-off rates, and tighter underwriting.
Chase U.S. Credit Card Yield
For 4Q/18, Chase’s yield of 11.57% edged up seven bps sequentially, soaring 93 bps YOY. Chase’s U.S. credit card yield for 3Q/18 was 11.50% and 10.64% for 4Q/17. The Chase yield represents total net revenue (non-interest revenue + net interest income) as percentage of average loans.
Capital One U.S. Credit Card Yield
For 4Q/18, Capital One’s yield of 15.58% was down 15 bps sequentially, and up 50 bps YOY. Capital One’s U.S. credit card yield for 3Q/18 was 15.73% and 15.08% for 4Q/17. Capital One yield represents the average yield on credit card loans held for investment.
Bank of America U.S. Credit Card Yield
For 4Q/18, BofA’s U.S. credit card yield of 10.49% was up 29 bps sequentially, and up 45 bps YOY. Bank of America’s U.S. credit card yield for 3Q/18 was 10.20% and 9.75% for 4Q/17. Bank of America’s yield represents gross interest yield.
Citibank U.S. Credit Card Yield
For 4Q/18, Citibank’s U.S. bank credit card yield, excluding U.S. retail credit cards) of 10.74% was up 40 bps sequentially, and up 111 bps YOY. Citibank’s U.S. credit card yield for 3Q/18 was 10.34% and 9.63% for 4Q/17. Citibank’s average yield is calculated as gross interest revenue earned divided by average loans.
Top 4 Average U.S. Credit Card Yield
Chase Yield Metric
Capital One Yield Metric
Bank of America Yield Metric
Citibank Yield Metric
Source: American Express; Discover; Chase; Bank of America; Capital One; Citibank; RAM Research; CardData