This year the banks have a lot of reasons to smile. Despite the growing concerns about the still unstable economy and the ever increasing unemployment rate, most of the credit card lenders are heaving a sigh of relief because most of the consumers are paying their dues on time. In fact, this year the number of customers who are making an effort to repay their debts have been on the increase, thus reducing the number of write-offs which is in turn helping the banks post profits beyond their expectations.
Capital One Financial Services leads the pack by posting the least number of credit card debt write-offs. Starting from 9.28% in the month of June, the rate of defaulters fell to just 8.13% in the month of July. In addition to this, the delinquency rate at Capital One also showed a southward trend. The delinquency rate that stood at 4.79% in June fell to 4.66% in July. With the delinquency rate seeing a dip, the bank is positive that the number of write-offs will also continue to slow down.
Another bank that reported a drop in the charge-off is JP Morgan Chase. The rate of defaulters that stood at 8.38% the previous month dipped to 7.95% this month. The delinquency rate also fell to 4.06% this month as compared to the 4.13% last month. One of the other credit card lenders that saw a record low this year in terms of write-offs is Discover Financial Services. The write-offs slipped to 7.28% this month from 8% last month. Late payments also dropped to 4.72% in July as compared to 4.81% in the month of June.
One of the banks that underwent tremendous losses during recession, Bank of America, also posted a drop in the write-off rate. The rate of charge-offs fell to 11.39% as compared to 11.98% in the month on July this year. This dip further boosts the sharp decrease that was noticed by the bank in the month of June. The write-off rate that stood at 12.7% in May fell to 11.98% in June and has been on a downward spiral ever since. The lowest rate of delinquency was also reported by Bank of America this year. The delinquency rate in the month of July stood at 5.92% as compared to the 6.16% in the month of June.
Though the write-off rate and the defaulter rate is on the decrease, it is still high as compared to the figures before recession set it. However, the good news is that the consumers are now making an effort to clear off their credit card debts.