30 day delinquency, among the nation’s top four credit card issuers, continued to march upward, now hovering at levels not seen in more than seven years. It is the highest level for a first-quarter since 2013 and rose slightly from the prior quarter, and one-year ago.
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 seven quarters, according to RAM Research.
30 Day Delinquency – Top 4 Peer Group
Early stage credit card delinquency (30+ days) for the fourth-quarter (4Q/19), among the nation’s Top 4 issuers, increased 8 basis points (bps) sequentially, and edged up 2 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 2.42% for 4Q/19, compared to 2.34% for 3Q/19 and 2.40% for 4Q/18. For the fourth-quarter of 2015, the Top 4 reported a U.S. credit card delinquency rate of 1.96%, according to figures collected by CardData and PYRPTS.
Top 4 U.S. Issuer Q4 Credit Card Delinquency
Chase, reported U.S. credit card delinquency sequentially increased 3 bps in 4Q/19, and up 4 bps gain YOY. Chase reported 4Q/19 delinquency of 1.87%, compared to 1.84% for 3Q/19 and 1.83% for 4Q/18. For the fourth-quarter of 2015, Chase reported a U.S. credit card delinquency rate of 1.41%. One-year ago Chase rose 8 bps from the prior quarter, and up 3 bps from the prior year.
Capital One, reported U.S. credit card delinquency soared 22 bps in 4Q/19 from the prior quarter, but down 11 bps from one-year ago. Capital One reported 4Q/19 delinquency of 3.93%, compared to 3.71% for 3Q/19 and 4.04% for 4Q/18. For the fourth-quarter of 2015, Capital One reported a U.S. credit card delinquency rate of 2.92%. One-year ago Capital One rose 24 bps from the prior quarter, and up 3 bps from the prior year.
Bank of America, reported U.S. credit card delinquency sequentially increased 5 bps in 4Q/19, compared to a 7 bps gain YOY. Bank of America reported 4Q/19 delinquency of 2.09%, compared to 2.04% for 3Q/19 and 2.02% for 4Q/18. For the fourth-quarter of 2015, Bank of America reported a U.S. credit card delinquency rate of 1.81%. One-year ago Bank of America rose 12 bps from the prior quarter, and up 10 bps from the prior year.
Citibank, reported U.S. credit card delinquency edged up 5 bps in 4Q/19 from the prior quarter, and up 10 bps from one-year ago. Citibank reported 4Q/19 delinquency of 1.80%, compared to 1.75% for 3Q/19 and 1.70% for 4Q/18. For the fourth-quarter of 2015, Citibank reported a U.S. credit card delinquency rate of 1.568%. One-year ago Citibank rose 8 bps from the prior quarter, and up 8 bps from the prior year.
2020 Card Delinquency Outlook
Senior Analyst Robert McKinley notes historically, the delinquency rate will rise 5 bps to 12 bps in the fourth-quarter. Therefore, the 2019 rate of increase is slightly higher for a fourth-quarter but continues to build on the upward trajectory of 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 Bankcenter and CardBuzz.
If short-term interest rates hold and employment remains strong it is likely the delinquency rate for 2020 will mirror 2019, rising by 14 bps at the end of 2020 to 2.50%. However, the current trade tariff war, currency devaluation and looming, long-overdue global recession could as well as the current coronavirus scare could send all credit card metrics off the map in 2020 and 2021, notes financial expert, Professor Cardworthy.
Consumer debit ratios for the second-quarter plummeted to levels not seen in more than 40 years. The Financial Obligations Ration (FOR) dropped 53 basis points (bps) over the past two years, while the Debt Service Ratio (DSR) has declined 27 bps since the second-quarter of 2017, based on figures released by the Federal Reserve.
Sources: Federal Reserve; CardData; RAM Research; CardTrak; CardFlash; Cardworthy; CardWeb; PYRPTS; CardBuzz; Bankcenter; PYVNTS; Ruebud Media; Red3 Media; Chase; Capital One; Bank of America; Citibank