Credit card charge-offs and delinquencies improved at Capital One Financial and Discover Financial Services in June as fewer Americans fell seriously behind on credit card payments.
The companies said yesterday that their credit card delinquency rates in June fell to the lowest levels this year. Delinquencies are a sign of future losses.
Discover said in a regulatory filing that its credit card delinquency rate fell to 4.81 from 4.95 in May. At Capital One, the rate inched down to 4.79 per cent from 4.8 per cent.
Both companies said their charge-off rates fell to the lowest levels this year. Charge-offs are debts a company believes it will never collect. Capital One’s annualised net charge-off rate for US credit cards fell to 9.28 per cent in June from 9.48 per cent in May. Discover’s charge-off rate fell to eight per cent from 8.82 per cent.
Capital One’s US auto loan charge-off rate rose to 2.72 per cent in June from 1.87 per cent in May. Its auto loan delinquency rate was little changed at 7.74 per cent, compared with 7.75 per cent in May.
For credit card international operations, including Canada and Britain, Capital One’s charge-off rate rose to 8.29 per cent from 8.21 per cent, while the delinquency rate fell to 6.03 per cent from 6.08 per cent.