U.S. credit card delinquency among the Top 100 U.S. issuing banks in the second-quarter edged down 2 basis points (bps) sequentially, and up 8 bps YOY (year-on-year). Nonetheless, the seasonally adjusted (SA) delinquency ratio is the highest since the first-quarter of 2013, according to the Federal Reserve.
Second-quarter card delinquency among the nation’s Top 4 credit card issuers also 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 from the second-quarter of 2015. It is the highest second-quarter ratio for more than seven years, according to figures collected by CardData.
According to the S&P/Experian Consumer Credit Default Indices for July, the overall rate in consumer credit defaults headed up by 2 bps (basis points) over the past year. The auto loan default rate rose 2 bps and the first mortgage default rate nudged up 3 bps since July 2018. The bank card default rate declined 13 bps over the same period.
Historically, the second-quarter delinquency changes are meaningless, and do not impact the overall upward momentum in U.S. credit card delinquency concludes RAM Research.
Top 100 U.S. Credit Card Delinquency
The 30+ day delinquency rate, seasonally adjusted, among the top 100 U.S. banks for the second-quarter (2Q/19) decreased 2 bps (basis points) from the prior quarter, and up 8 bps year-on-year (YOY).
On a not seasonally adjusted basis (NSA), the delinquency rate among the top 100 U.S. banks for 2Q/19, decreased 24 bps from 1Q/19, but up 3 bps YOY.
The top 100 U.S. banks posted a 30+ day SA delinquency rate of 2.56% for 2Q/19, compared to 2.58% in 1Q/19, and 2.48% for 2Q/18.
On a NSA basis the top 100 U.S. banks posted a 30+ day delinquency rate of 2.31% for 2Q/19, compared to 2.55% in 1Q/19, and 2.29% for 2Q/18, based on figures released by Federal Reserve.
Top 4 U.S. Credit 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%.
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.
Capital One 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.
Bank of America 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.
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.
Third-Quarter Card Delinquency Outlook
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 unraveling economy, and employment rates erode, suggested by mounting technical evidence, credit card delinquency could easy rise 35 bps for 4Q/19.
Additionally, with manufacturing activity slowing to its lowest in 10 years, the current Trump trade tariff tax war and more currency devaluation coming, a full-blown, overdue global recession could send all U.S. credit card metrics off the map in 2020, says Robert McKinley, Senior Analyst of CardData, CardFlash and CardTrak.
A Complete Full Quarterly Report on Top 100 U.S. Credit Card Delinquency (1Q/15-1Q/19] is Available for Immediate PDF Download
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