Third-quarter card delinquency, among the nation’s top four credit card issuers, continued to march upward, now hovering at levels not seen in seven years. It is the highest level for a third-quarter since 2013 and rose significantly from the prior quarter.
Noteworthy is the fact all four of the nation’s top bank credit card issuers posted sequentially gains in delinquency. On an annual basis, all but Capital One, posted gains. Capital One has been tightening in its sub-prime market segment for the past six quarters.
Top 4 Third-Quarter Card Delinquency
Early stage credit card delinquency (30+ days) for the third-quarter (3Q/19), among the nation’s Top 4 issuers, decreased 16 basis points (bps) sequentially, and rose 7 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 2.34% for 3Q/19, compared to 2.18% for 2Q/19 and 2.27% for 3Q/18. For the third-quarter of 2015, the Top 4 reported a U.S. credit card delinquency rate of 1.98%, according to figures collected by CardData.
Top 4 U.S. Issuer Credit Card Delinquency
Chase, reported U.S. credit card delinquency sequentially increased 13 bps in 3Q/19, and up 9 bps gain YOY. Chase reported 3Q/19 delinquency of 1.84%, compared to 1.71% for 2Q/19 and 1.75% for 3Q/18. For the third-quarter of 2015, Chase reported a U.S. credit card delinquency rate of 1.38%. One-year ago Chase rose 10 bps from the prior quarter, and down 1 bps from the prior year.
Capital One, reported U.S. credit card delinquency soared 31 bps in 3Q/19 from the prior quarter, and down 9 bps from one-year ago. Capital One reported 3Q/19 delinquency of 3.71%, compared to 3.40% for 2Q/19 and 3.80% for 3Q/18. For the third-quarter of 2015, Capital One reported a U.S. credit card delinquency rate of 3.28%. One-year ago Capital One rose 48 bps from the prior quarter, and down 14 bps from the prior year.
Bank of America, reported U.S. credit card delinquency sequentially increased 8 bps in 3Q/19, compared to a 14 bps gain YOY. Bank of America reported 3Q/19 delinquency of 2.04%, compared to 1.96% for 2Q/19 and 1.90% for 3Q/18. For the third-quarter of 2015, Bank of America reported a U.S. credit card delinquency rate of 1.71%. One-year ago Bank of America rose 11 bps from the prior quarter, and up 11 bps from the prior year.
Citibank, reported U.S. credit card delinquency edged up 9 bps in 3Q/19 from the prior quarter, and up 13 bps from one-year ago. Citibank reported 3Q/19 delinquency of 1.75%, compared to 1.66% for 2Q/19 and 1.62% for 3Q/18. For the third-quarter of 2015, Citibank reported a U.S. credit card delinquency rate of 1.54%. One-year ago Citibank rose 10 bps from the prior quarter, and down 3 bps from the prior year.
Third-Quarter Card Delinquency Outlook
Historically, the delinquency rate will rise 13 bps to 15 bps in the third-quarter. Therefore, the 2019 rate of increase is slightly higher for a third-quarter but continues to grow over the past seven years. Last year, the third-quarter YOY was flat, but rose 15 bps in 2017 and 14 bps in 2016, according to analysis by RAM Research.
If short-term interest rates hold and employment remains strong it is likely the delinquency rate will mirror 2018, rising by 14 bps at the end of 2019 to 2.48%. However, the current trade tariff war, currency devaluation and looming, long-overdue global recession could send all credit card metrics off the map in 2020 and 2021, notes Robert McKinley, Senior Analyst of CardData, CardFlash and CardTrak.
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Sources: Chase; Capital One; Bank of America; Citibank; RAM Research; CardData; CardTrak; CardFlash; Bankcenter; CardBuzz; PYVNTS; PYRPTS; Ruebud Media; Red 3 Media; The Cardworthy Company; Robear’s List