Credit Card Default Rates Rise in January for Capital One

COF: Capital One Financial logo
Capital One Financial

Capital One (NYSE:COF) reported an increase in the rates at which its customers defaulted on credit card balances in January, after seeing a decline in the previous month. Capital One’s total bad debt amounted to $189 million, or 4.08%, of the total loan balance in January, up from 3.98% in December last year. However, the current default rate is significantly below the 6.79% rate which the company reported a year ago. Delinquencies, or payments late by 30 days or more, also increased to 3.78% in January from 3.66% in December 2011. [1]

JPMorgan Chase (NYSE:JPM) and Citigroup (NYSE:C) have also reported a slight increase in their default rates in January, compared to December 2011 while Bank of America (NYSE:BAC) saw a decline.

Discover Financial (NYSE:DFS) reported a sharp decline in default rate to 2.75% of balances in January on an annualized basis, from 3.15% in December. Discover’s late payments also declined to 2.31% from 2.32%. The average default rate among the top five card issuers was 4.26% in January 2012, down from 4.45% in December and 6.97% in January 2011. [2]

Relevant Articles
  1. Capital One Stock Topped The Consensus In Q1, Is It Attractive?
  2. Capital One Stock Posted Better Than Expected Results in Q4, Is It A Buy?
  3. Capital One Stock Has A 20% Upside Potential
  4. What To Expect From Capital One Stock in Q3?
  5. Capital One Stock Has Limited Upside
  6. Capital One Stock To Post Mixed Q2 Results

See our full analysis for Capital OneCitigroupJPMorganDiscover Financial

Understand What Drives a Stock at Trefis

  1. Capital One Jan. default, late payment rates rise, Feb 15, 2012, Business Week []
  2. Credit Card Defaults Mixed, But Overall Trend Positive, eCredit Daily, Feb 17, 2012 []