Consumers have, in general, been very good about making sure all their credit card debt is paid on time in the last few years, but while that trend largely continued for the nation's top lenders, some also saw severely late payments tick upward in March.
Delinquent and defaulted payments fell overall once again in March, as consumers continued their efforts to make sure all bills are paid on time, but two of the nation's six largest lenders also saw the rate at which they had to write off severely delinquent accounts as uncollectable increased, according to a report from Dow Jones Newswires. Capital One Financial and JPMorgan Chase both reported increases in their charge off rates, though those were small. Capital One said it had to write off 3.85 percent of all accounts as being uncollectable, up from 3.84 in February, while Chase said its charge off rate rose to 4.4 percent of balances from 4.29 percent the month before. However, delinquencies fell substantially for both.
But despite those meager increases, delinquency and default fell overall, the report said. For instance, American Express saw its delinquency rate slip to just 1.3 percent of balances from 1.4 percent in February, and its charge off rate held steady at 2.4 percent. Meanwhile, credit card delinquency for Bank of America slipped to 3.6 percent from 3.75, and defaults fell to 5.48 percent from 5.56 percent. Meanwhile, Citigroup and Discover Financial Services also saw instances of both late payments and defaults slip in March, keeping with recent trends.
Even as instances of delinquency and charge offs continue to improve, many lenders are scaling back their marketing efforts, which had been on the rise in recent months, the report said. Mintel Comperemedia recently found that lenders sent out 282 million credit card offers in February, an increase of 6 percent from January, but a decline of 25 percent on a year-over-year basis.
"Some issuers are cooling off following a sustained period of aggressive growth," Andrew Davidson, senior vice president with Mintel, told the news agency.
Prime credit card charge offs drop to lowest level in years
The driving force behind continual declines in late payment rates may be borrowers with prime credit scores, as the rates of defaulted accounts hit a four-year low, and late stage delinquencies slumped to a six-year low in March, according to new data from Fitch Ratings. Defaults are 38 percent lower than they were at this time last year, while payments that were 60 days late or more are 51 percent beneath the levels observed at the end of 2009.
Consumers who want to ensure that they have strong credit ratings should not only stay current on all their various bills, including their credit cards, but also check their credit reports regularly. In some cases, these documents can contain unfair markings that can have an adverse effect on consumers' credit standings.