What Are The Card Charge-Off Rates For The Largest U.S. Card Issuers?

-2.49%
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149
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145
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Capital One Financial

American Express reported the lowest card charge-off rate among all major U.S. card issuers at 1.4%, while the figure for the card-focused bank Capital One was the highest among these lenders at over 4%.

Card_QA_ChargeOff_16Q2

Individual charge-off figures above are taken from the latest quarterly earnings releases for these card issuers. The weighted average charge-off rate represents the average card charge-off rate for these card issuers as weighed by their outstanding card balances. The average figure for the U.S. card industry is taken from data compiled by the Federal Reserve Bank of St. Louis here.

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Notably, card charge-off rates have nudged higher across the industry over the last two quarters after hovering around unusually low levels in 2014-15. This marks the ongoing normalization in consumer credit quality, which improved considerably due to low unemployment levels and steady economic growth since 2011. That said, the particularly high charge-off rate for Capital One over recent quarters could be indicative of more relaxed card lending criteria from the card-focused banking giant compared to its peers. The impact of a sharp increase in card charge-offs on our estimate for Capital One’s share price can be understood by making changes to the chart below, which captures the bank’s card loan provisions as a percentage of its total outstanding loan portfolio.

See the links below for more information about the U.S. banking industry:

See full Trefis analysis for U.S. Bancorp | Wells Fargo | JPMorgan ChaseBank of America | Citigroup | Capital OneAmerican Express | Discover

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