NEW YORK — Credit card delinquencies edged higher in July among the nation’s largest issuers, while the rate of loans written off as uncollectible declined, according to a new analysis.
The average credit card delinquency rate among the seven large lenders tracked by Seeking Alpha increased to 2.50% from 2.48% in June. Despite the increase, delinquencies remained below the prepandemic average of 2.68%.
Meanwhile, the average net charge-off rate fell to 3.28% from 3.42% in June. Net charge-offs represent loans that lenders have determined are unlikely to be collected.
Credit card lending also slowed during the month. The seven banks tracked by Seeking Alpha reported a combined $538.4 billion in credit card loans in July, down 0.2% from June but 4.8% higher than a year earlier.
Tightened Standards
The Federal Reserve’s Senior Loan Officer Opinion Survey on Bank Lending Practices found banks tightened lending standards for consumer credit cards during the period, while consumer demand for credit card borrowing was largely unchanged, Seeking Alpha reported.
Among individual lenders, Citibank recorded a notable improvement in credit performance, with its net charge-off rate falling to 1.90% in July from 2.25% in June. Its three-month average was 2.07%.
The Findings
Among the findings:
- JPMorgan Chase had the lowest three-month average net charge-off rate among the lenders cited, at 1.54%, followed by American Express at 2%.
- Capital One Financial also reported improvement, with its net charge-off rate declining to 4.12% from 4.37% in June.
- American Express was the only lender tracked that did not report a month-over-month improvement in its net charge-off rate. Its U.S. consumer card net charge-off rate increased to 1.7% in July from 1.4% in June.
What Data Suggest
The figures suggest consumer credit performance remained relatively stable in July, with a slight increase in borrowers falling behind on payments offset by an improvement in the amount of credit card debt lenders ultimately wrote off, according to Seeking Alpha’s analysis.
