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Credit Card Applications » News » Other » Amex's write-off rates fall as capital one's gets higher

Amex's write-off rates fall as capital one's gets higher

November 03, 2010
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AmEx's write-off rate for the month of September has fallen from 5.5 to about 4.7, this being the lowest since the recession, while a small percentage of its customers paid their bills a little late.

AmEx, a company based in New York, has always catered to the more affluent sections when compared to other card companies.Issuers generally write off loans when they are over 180 day overdue as it is assumed that the balance would not be collected.In the recent past, banks have had to write off huge sums of money as cardholders were struggling to pay.The charge off rate had leapt to 10.66% of balances, between the months April and June as per the reports by the Federal Reserve.Prior to the recession the average was around 3%-4%.

Capital One stated that its write off has however stated that its write-off rates have gone up as consumers were struggling to pay them off.The net charge offs rose from 8.19% to 8.38% in the month of August.Since loans were written off after the 180-day period, Capital One's write-off rates rose to around 10.87% in the month of April alone, and credit card companies all over had written off huge loans in record time.Though defaults seemed to decline steadily through July, it started going up by the end of summer. The only positive sign was a dip in the debt rate which was about a month past the due date.

Credit card delinquency rates have been on the decline although there has been a rise in charge offs in the month of September.It has been reported by the McLean based company that the charge off rate annually has been at 8.19% in August and gone up to 8.38% in September.It also reported $378 million in net principal charge offs in the month of September alone.A part of the accounts, which were 30 days behind their payment schedules (delinquent), had seen a drop.The delinquency rates had gone down from around 4.56 to about 4.53 in the month of August.Capital one had reported a second quarter profit of about $608 million and will report the results of its third quarter sometime later, by the end of this month.Capital One had undergone a loss of around $277 million last year during the same quarter, when it had to repay the money from the government's relief program, or Troubled Asset Relief Program (TARP).

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