Capital One Credit Card Customer Payments Improve; March Late Payments, Defaults at Two-year Low

by Mercator Advisory Group 0

Capital One stayed in step with the industry in continuing to reduce credit card delinquencies and charge-offs.

The rate of U.S. card payments late by 30 days or more dropped to 3.59 percent of balances on an annualized rate during the month, from 3.83 percent in February.

In March 2010, Capital One’s late payment, or delinquency, rate was 5.3 percent. The statistic is considered an indicator of potential default by customers.

Charge-offs, or the balances written off as uncollectible, fell to $248 million, or 5.87 percent, from $256 million, or 5.91 percent, in February. The figure peaked at 10.87 percent a year ago.

It is noted that industry trends for U.S. issuers are moving in the same direction.

Industry wide, the charge-off rate peaked in the 2010 second quarter at 10.9 percent of balances, according to the Federal Reserve. By the fourth quarter of 2010, the latest period for which data is available, the rate had dropped to 7.7 percent.
In the two years prior to the recession, it averaged 3.82 percent
Consumer credit outstanding has also dropped as card issuers have charged off accounts, and consumers reduced their card-based borrowing.

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