Delinquency Declines for Nine of the Top Ten Issuers

In a sign that credit quality is slowly improving in the card industry, delinquency for the second quarter, among the top VISA and MasterCard issuers, declined 26 basis points over the first quarter to 6.18%. However, compared to one-year ago, delinquency rates (30+ days) have climbed 32 bps, from 5.86%. All but one top issuer reported a decline in delinquency rates during the second quarter. FleetBoston reported that its delinquency rate edged up by 6 bps to 3.89%, compared to the first quarter. The largest declines were experienced by Providian and Sears National Bank. Meanwhile, American Express reported that its 2Q/03 delinquency rate fell to 2.7% from 3.1% in the first quarter, and 3.1% in 2Q/02. Discover reported its over-30-day delinquency rate increased 58 basis points to 6.21%, and the over-90-day delinquency rate increased 36 basis points to 3.01%, compared to the second quarter of 2002. For more historical information on delinquency rates visit CardData (


DAYS 2Q/03 1Q/03 CHNG
1. Citigroup: 90+ 1.86% 1.91% – 5 bps
2. MBNA: 30+ 4.46% 4.74% -28 bps
3. Bank One: 30+ 3.95% 4.08% -13 bps
4. Chase: 30+ 4.40% 4.59% -19 bps
5. Cap One: 30+ 4.83% 4.97% -14 bps
6. Providian: 30+ 9.72% 10.31% -59 bps
7. BofA: 30+ 5.79% 6.09% -30 bps
8. Fleet: 30+ 3.89% 3.83% + 6 bps
9. Sears Natl 30+ 7.41% 7.87% -46 bps
10. Dir Merch: 30+ 11.20% 11.50% -30 bps
30+ DAY AVG*: 6.18% 6.44% -26 bps
NR- not reported * 90+ day is not meaningful
* does not include Household which is now part of HSBC
SOURCE: CardData (

CompuCredit 2Q/03 Profits Top $20MM

Sub-prime specialist CompuCredit reported second quarter net income of $20.3 million, compared to net income of $33.2 million in the first quarter, and compared to a net loss in 2Q/02 of $37.1 million. Net charge-offs, as a percentage of average managed loans, hit 20.9% in the second quarter, compared to 20.3% in the previous quarter, and 15.0% one-year ago. Excluding receivables at or near charge-off at the time of purchase, the charge-off rate would have been 11.0% for 2Q/03 and 10.2% for 1Q/03. At the end of the second quarter, the 60-plus day delinquency rate was 10.5%, compared to 13.3% in 1Q/03 and 9.0% at June 30, 2002. CompuCredit’s second quarter managed loans were $2.2 billion, compared to $2.5 billion in the first quarter. On August 1st, the Company, in conjunction with Merrill Lynch, purchased approximately $824 million in credit card receivables from Providian, representing approximately 435,000 credit card accounts. One year ago, Providian dumped $2.6 billion in sub-prime card outstandings to two limited liability companies setup by Goldman Sachs, Salomon Smith Barney, CardWorks, and CompuCredit. For complete details on CompuCredit’s 2Q/03 performance visit CardData ([][1]). (CF Library 4/16/02; 8/5/03)


VISA Mini Cards Exceed 15 Million Since October

More than 15 million “VISA Mini Cards” have been produced and issued by IL-based Versatile Card Technology since the launch of the card in October. Bank of America’s “Mini VISA” is about half the size of a regular credit or debit card that can be attached to a key chain. The card can only be used with swipe terminals, not ATMs. BofA has exclusive rights to issuing the mini card for a one-year period. Following the first year, under a license from Bank of America, VISA member banks will be permitted to issue VISA-branded mini cards, for which Bank of America will receive royalty payments. The “Mini VISA” is a response to the successful launch in March 2002 of the Discover “2GO Card,” a small, oval shaped credit card, in a protective case, that attaches to a key chain, belt, or money clip. Discover has not released data on the number of “2GO Cards” issued. Versatile Card Technology is a certified manufacturer of VISA cards with facilities located in Turkey, Germany, Mexico, Singapore, South America and India. (CF Library 3/21/02; 10/2/03)

CheckFree Revenues Up 11% for 2Q/03

CheckFree reported second calendar quarter revenue of $144.6 million and net income of $20.0 million, compared to revenue of $130.6 million and net income of $12.8 million, in the same period one-year ago. The net loss for the quarter of $17.0 million, compared to a net loss of $59.4 million, in 2Q/02. CheckFree processed about 120.2 million transactions in the quarter, an increase of 7% the 111.9 million transactions processed in the previous quarter, and a 37% increase over the 87.9 million transactions processed in the year-ago quarter. Transactions in the Payment Services category were up 3% from the previous quarter. CheckFree processed 32.7 million transactions and recorded revenue of $12.3 million in the quarter, compared to 31.6 million transactions and revenue of $12.8 million for the prior quarter. As of June 30th, consumers were able to both view and pay bills through 949 Consumer Service Providers using CheckFree’s services, compared with 842 at the end of the previous quarter, and 584 at the end of the year-ago quarter. For complete details on CheckFree’s 2Q/03 results visit CardData ([][1]).


First Premier’s Card Formula Defies Bad Economy

The fastest growing sub-prime credit card portfolio in the nation continues to defy the fall-out in the sub-prime market with its success in offering cards with high fees and low credit limits. SD-based First Premier Bank reported a 21% gain in its cardbase, an 18% increase in outstandings, and a 13% increase in volume for 2Q/03 compared to one-year ago. Over the past twelve months the issuer has added nearly 500,000 cardholders to bring its total of cards to 2,874,705. First Premier offers credit cards with initial fees exceeding $200 and credit limits under $400. At the end of the second quarter First Premier had $717,270,874 in card outstandings. The average balance per account is $255 and the average volume per card for the second quarter is $82. For complete details on First Premier’s 2Q/03 performance visit CardData ([][1]).


U.S. Bancorp Wins Homeland Security P-Card

U.S. Bancorp yesterday was awarded the GSA “SmartPay Task Order” to provide purchasing card services to the newly-created Department of Homeland Security. The DHS consists of 22 agencies with an estimated annual charge volume in the hundreds of millions of dollars. This is the first major task order award since the GSA “SmartPay” program was started in 1998. The contract is for one year and includes four one-year options to renew contingent upon GSA exercising the four Master Contract option periods. In 1998, GSA awarded contracts to provide federal agencies with commercial card services, including travel, purchasing and fleet cards. The GSA “SmartPay” contracts were effective from November 30, 1998 through November 29, 2003, with five one-year options to renew, through November 2008. In addition to U.S. Bank, the initial GSA SmartPay contract awards were made to four other service providers.

Spiegel Continues to Feel Card Impact

The Spiegel Group reported that net sales for June were down 19% compared to one-year ago as it continues to rebuild its credit card sales. The company says it believes that direct sales continue to be negatively impacted by the company’s decision in early March to cease honoring the private-label credit cards issued by First Consumer National Bank to customers of its merchant companies (Eddie Bauer, Newport News and Spiegel Catalog). In early May, the company launched new credit card programs using Alliance Data Systems. Prior to the shut-down of its FCNB cards, nearly 75% of Spiegel Catalog sales were made on its private label card, while 60% of Newport News sales and 20% of Eddie Bauer sales are made on their respective cards.

IRS Renews OPC Contract

Tier Technologies’ Official Payments Corporation subsidiary has won the first of four optional one-year contract renewals with the Internal Revenue Service. The renewal of the contract, first awarded in April 2002, allows Official Payments to continue to collect and process individual federal income tax payments by credit card through May 31, 2004. Official Payments began processing credit card tax payments for the IRS in 1999.

Metris Funds $125 Million Term Loan

Metris Companies announced Friday it has successfully funded the one-year, $125 million term loan agreement announced earlier this month which will help the company return to profitability. The Company used a portion of the proceeds to repay today the $100 million term loan due June 30, 2003. The completion of this funding represents a further step in the Company’s plan that is focused on liquidity and a return to profitability.

AmEx Unleashes Tiger in Atlanta

American Express is sponsoring a private cardholder exhibition with Tiger Woods on September 30th in Atlanta’s historic Piedmont Park. Tiger will give attendees valuable insights on how he prepares for big tournaments and delivers winning shots in the most pressure-packed moments. Cardmembers can now purchase tickets through Ticketmaster at 1-800-TOUR-TIX.

Hypercom Deals

NY-based ISO POS Payment Systems has awarded Hypercom a contract with a potential for up to 5,000 high-speed card payment terminals and technology, including the “T7Plus with HyperSafe” operating system. PPS is a full service provider of electronic transaction products and services to more than 400,000 merchants nationwide. The PPS deal is the latest in a series of new contract wins for Hypercom. Earlier this month, Staples announced it will purchase and install 6,500 Hypercom card payment terminals and technology including the new “ICE 6000Plus.” In April, Hypercom was awarded a 12-month contract for 10,000 card payment terminals and technology for use by FL-based JRs POS Depot. Also in April, IL-based ABANCO International awarded Hypercom a $16 million contract for payment technology and terminals. ABANCO is an ISO and a registered agent of EFS National Bank and Fleet National Bank. NJ-based MSI Merchant Services also signed a one-year contract this year for 10,000 Hypercom “ICE” card payment terminals. MSI provides services to more than 25,000 businesses in the retail, hospitality and emerging market sectors. (CF Library 4/2/03; 4/15/03; 6/11/03)