Second-quarter card delinquency among the nation’s top credit card issuers dipped from the prior quarter, due to seasonality and increasing balances. However, over the past five years, the second-quarter delinquency ratio has been on an upward trend, rising 35 bps (basis points) from the second-quarter of 2015. It is the highest second-quarter ratio for more than seven years.
Top 4 Second-Quarter Card Delinquency
Early stage credit card delinquency (30+ days) for the second-quarter (2Q/19), among the nation’s Top 4 issuers, decreased 18 basis points (bps) sequentially, and rose 11 bps year-on-year (YOY).
The average rate among the Top 4 issuers (Chase [JPM], Capital One [COF], Bank of America [BAC], Citibank [C]) was 2.18% for 2Q/19, compared to 2.36% for 1Q/19 and 2.07% for 2Q/18. For the second-quarter of 2015, the Top 4 reported a U.S. credit card delinquency rate of 1.83%, according to figures collected by CardData.
Chase U.S. 30+ Day Delinquency
Chase, reported U.S. credit card delinquency sequentially decreased 14 bps in 2Q/19, compared to a 6 bps gain YOY. Chase reported 2Q/19 delinquency of 1.71%, compared to 1.85% for 1Q/19 and 1.65% for 2Q/18. For the second-quarter of 2015, Chase reported a U.S. credit card delinquency rate of 1.29%.
Capital One U.S. 30+ Day Delinquency
Capital One, reported U.S. credit card delinquency dropped 32 bps in 2Q/19 from the prior quarter, and up 8 bps from one-year ago. Capital One reported 2Q/19 delinquency of 3.40%, compared to 3.72% for 1Q/19 and 3.32% for 2Q/18. For the second-quarter of 2015, Capital One reported a U.S. credit card delinquency rate of 2.84%.
Bank of America U.S. 30+ Day Delinquency
Bank of America, reported U.S. credit card delinquency sequentially decreased 12 bps in 2Q/19, compared to a 17 bps gain YOY. Bank of America reported 2Q/19 delinquency of 1.96%, compared to 2.08% for 1Q/19 and 1.79% for 2Q/18. For the second-quarter of 2015, Bank of America reported a U.S. credit card delinquency rate of 1.68%.
Citibank U.S. 30+ Day Delinquency
Citibank, reported U.S. credit card delinquency edged down 13 bps in 2Q/19 from the prior quarter, and up 14 bps from one-year ago. Citibank reported 2Q/19 delinquency of 1.66%, compared to 1.79% for 1Q/19 and 1.52% for 2Q/18. For the second-quarter of 2015, Citibank reported a U.S. credit card delinquency rate of 1.49%.
Third-Quarter Card Delinquency Outlook
Historically, the delinquency rate will historically rise 14 bps in the third- quarter.
If short-term interest rates hold and employment remains strong it is likely the delinquency rate will mirror 2018, rising by 23 bps at the end of 2019. However, if rate short-term interest rate cuts are made, in the face of a robust economy, and employment rates erode, suggested by mounting anecdotal evidence, credit card delinquency could easy rise 35 bps for 4Q/19. Additionally, the current trade tariff war and currency devaluation producing a full-blown, long-overdue global recession could send all credit card metrics off the map in 2020, notes Robert McKinley, Senior Analyst of CardData, CardFlash and CardTrak.
Expected the 30-day average delinquency ratio among the Top 4 U.S. issuers to post at 2.31% for the third-quarter, and 2.44% for 4Q/19, according to projections by RAM Research.
A Complete Full Quarterly Report on Top 4 U.S. Credit Card 30+ Day Delinquency (1Q/15-1Q/19] is Available for Immediate PDF Download
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