Credit Card News
Advertising Disclosure
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.
Credit Card Applications » News » Other » Rise in credit card charge-offs at Bank of America

Rise in credit card charge-offs at Bank of America

By
Add to Favorites:
Rise in credit card charge-offs at Bank of America

The month of October saw the Bank of America writing off debts as uncollectible. However, there was also a drop in the late payments, which indicated that charge-offs were just a small part, but the overall trend seems to be in improving payment patterns by customers.


In the month of October alone, Bank of America has written off 10.15% of the balances, which is up from 9.98% in the month of September. Bank of America posted a peak rate (13.53%), in charge-offs for December alone. If the loans are 180 days past due, credit card companies write off these loans, as they are considered “uncollectible”.


Charge-off rates have generally peaked in the second quarter, and an increase in one month only reflects the unique factors of the bank and not necessarily a reversal in the overall trends. Charge-off rates have peaked at 10.66% of balances, as per the figures from the Federal Reserve. The average before the recession was 3.82%. However, Capital One has stated that their cardholder payments improved for the month of October, and it marked the best performance this year. They claim that their customers seem to have improved on managing their finances.


When the Federal Reserve releases the results of the third quarter, then the overall rate is most likely to improve. The revolving balances in consumer credit have dropped in the month of September, and it has been the lowest since May 2005. The overall credit balances have also shown a sharp decline in the last two years.


This is mainly due to the fact that consumers are making a conscious effort to reduce their balances and are using their credit cards less. Credit card companies are also cutting down on the credit lines of their clients. The charge-offs have been quite huge in the last three years.


The only positive outcome of all this has been the fact that late payments (by 30 days), for Bank of America has slipped to around 5.6% in the month of October, while it was at 5.71% in September. This has been reported as the best delinquency rate this year. One can get a rough idea as to where the charge-offs are headed, going by the late payment records.


Charlotte, N.C. – based bank, has also posted the drop in late payments, which is a clear indication that charge-offs are just one aspect, and there is an overall trend in improving payments amongst cardholders.

Add to Favorites:

Related News:

Amex Acquisition Increases Security

By Dar Dowling, Posted: December 9, 2016

American Express has bought InAuth, Inc., a company specializing in providing customers with mobile device authentication and intelligence solutions. Continue reading
Citi Card Tracker Unveiled

By Dar Dowling, Posted: December 8, 2016

There is a new feature in town now that Citi credit cardholders in the U.S. can track where their replacement card is every step of the way as it travels to their mailbox. This new feature is available in the Citi Mobile App, whether the ... Continue reading
New Digital Wallet From SDCCU

By Dar Dowling, Posted: December 7, 2016

The San Diego County Credit Union (SDCCU) is rolling out their brand new digital wallet app for iPhone users. With the app people can use their phone to safely do their banking, whether that means using their phones to expedite cash ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Get 0% Intro APR on Balance Transfers and Purchases for 21 months. After that, the APR will be 12.24%-22.24% based upon your creditworthiness.
For Excellent/Good Credit
Earn 1% cash back on gas and grocery purchases. Terms apply.
For Fair Credit
Guaranteed $500 Unsecured Credit Limit
For Bad Credit