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Card issuers see delinquencies rise, charge-offs fall in September


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Banking Essentials Newsletter: September Edition

Card issuers see delinquencies rise, charge-offs fall in September

Major U.S. credit card issuers saw delinquency rates increase modestly across the board in September.

Capital One Financial Corp. posted the biggest increase as its delinquency rate jumped by 9 basis points to 2.06%. Discover Financial Services' delinquency rate was 1.64%, an increase of 5 basis points from the previous month, while JPMorgan Chase & Co. saw its rate rise by 6 basis points to 1.22%.

Delinquencies at American Express Co. increased by 4 basis points to 0.95%, Citigroup Inc. saw its delinquency rate climb by 7 basis points to 1.50% and Bank of America Corp.'s rate ticked up 1 basis point to 1.56%.

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Charge-off rates at major issuers mostly declined in September, with Bank of America posting the biggest decrease. Its charge-off rate dropped by 45 basis points to 2.35%.

American Express' charge-off rate edged down by 12 basis points to 1.36% and Capital One's decreased by 5 basis points to 2.09%. Discover saw its charge-off rate decline to 1.85%, a decrease of 25 basis points from the previous month, and JPMorgan's charge-off rate ticked down 9 basis points to 2.32%.

Citigroup was the only issuer to report an increase for the month as its charge-off rate rose by 3 basis points to 2.44%.

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American Express also provides delinquency and charge-off statistics for certain segments within its card businesses.

For its U.S. consumer services segment, the net write-off rate, based on principal only, dropped to 1.6% in September from 1.8% in August. The delinquency rate for the segment increased to 1.3%. The net write-off rate in the U.S. small-business segment, based on principal only, saw a month-over-month decrease, dropping to 1.4% in September as compared to 1.6% in August. The delinquency rate for the U.S. small-business segment remained flat month over month in September at 1.1%.

American Express reported a month-over-month increase of 76 basis points in its portfolio yield for the month of September, jumping to 22.39% from 21.63% in August. Discover also saw an increase in its portfolio yield, climbing to 18.65% from 18.62%.

Other card issuers reported decreases in their portfolio yields.

Bank of America's yield edged down to 15.84% from 15.92%, Capital One's yield decreased to 21.05% from 21.22%, Citi's yield declined to 17.54% from 18.19% and JPMorgan's yield slipped to 17.80% from 18.20%.

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Click here for the underlying data for credit card master trust yields, net charge-offs and delinquencies.

The monthly performance of the trust is reported in the 10-D filing, which can be accessed under the Documents section of a company's briefing book page on the SNL website.