Rise in credit card charge-offs at Bank of America - Other News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most 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

Rise in credit card charge-offs at Bank of America
The content is accurate at the time of publication and is subject to change.

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.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

New Visa Cards From CRYPTO.com

Posted: July 17, 2018

CRYPTO.com, a payments and cryptocurrency platform, is now offering three new cards - Icy White, Jade Green and Royal Indigo. These are Cryptocurrency-based credit cards. With them, people can get a wide range of perks and benefits, ... Continue reading
A New Priority Pass Restaurant and Lounge in Washington D.C.

Posted: July 16, 2018

Hitting the lounge for some rest and relaxation when flying can be a great perk. And now people with Priority Pass membership - or a credit card giving them Priority Pass lounge access - have two new options to check out when passing ... Continue reading
New LL. Bean Credit Card

Posted: July 13, 2018

L.L. Bean's credit card portfolio was purchased by Citi Retail Services, and they have now partnered with MasterCard to launch a new credit card, offering 4% on purchases made at L.L. Bean. But that is not all; With the L.L. Bean ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate.
For Excellent, Good Credit
We'll match all the Miles you've earned at the end of your first year. For example, if you earn 30,000 Miles, you get 60,000 Miles.
For Excellent, Good Credit
0% Intro APR on Balance Transfers and Purchases for 18 months. After that, the variable APR will be 15.74% - 25.74% based on your creditworthiness*
For Excellent, Good Credit
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!