Credit Card Gist

Chase reported declines in June in the levels of both its charge-offs and late payments in its monthly filing with the U.S. Securities and Exchange Commission Thursday. Charge-offs are loans issuers do not expect to collect and write off their books as losses, typically 180 days after the latest payment on the account. The falls come despite persistently high unemployment figures and anemic economic recovery.

Chase’s charge-off rate fell to 8.32 percent of total balances in June, down more than one percent from 9.35 percent in May.

Chase’s 30-day delinquency rate, measuring the proportion of accounts with payments late by 30 days or more, dipped more modestly – to 4.3 percent in June from 4.38 percent in May, marking the sixth straight monthly drop and the lowest point of the year.

The credit card industry appears to have turned a corner, after writing off billions of dollars in the aftermath of the financial meltdown. By the first quarter of this year, the charge-off rate was just short of 10 percent, compared with 3.8 percent in the second quarter of 2007, before the recession started.

(Via Google.com)

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Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).

Capital One reported Thursday that its net charge-offs in the U.S. declined for a third-straight month, despite stubbornly high unemployment. Charge-offs are loans lenders do not expect to collect and write off their books as losses, typically 180 days after the last payment on the account. Moreover, the issuer reported lower levels of late payments in June, seen as another signal that the industry may have turned a corner after credit card companies suffered record losses in the aftermath of the financial meltdown.

Capital One reported in its monthly filing with the U.S. Securities and Exchange Commission a charge-off rate at its U.S. card business of 9.28 percent in June, down from 9.48 percent in May. Internationally, however, the bank’s charge-offs rose to 8.29 percent from 8.21 percent.

Capital One’s 30-day delinquency rate in the U.S., measuring payments late by 30 days or more, decreased to 4.79 percent in June from 4.8 percent in May. The issuer’s international delinquency rate also dropped last month – to 6.03 percent from 6.08 percent.

(Via Google.com)

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).

American consumers reduced their credit card debt by about $7.4 billion in May, an annualized rate of 10.5 percent, according to the latest Federal Reserve data. This has been the trend throughout the recession. The Fed’s statistics show that, since the end of 2008 consumers have reduced their debt by about $127 billion, or 13 percent. Moreover, credit card delinquencies reached their lowest rate since 2002, according to the latest American Bankers Association report.

But how much should we read into these numbers? Are consumers really that much better off, even as the jobless rate has been stubbornly high and the economy is still stagnant, or are there other factors at play here.

Credit card balances fell by about $19.5 billion in the first quarter of this year, according to the Federal Reserve. $18.7 billion of this has actually been written off by the lenders, according to data from the Federal Deposit Insurance Corp.

Moreover, while the overall credit card delinquency rate has gone down to a record low, the average amount owed on delinquent accounts has actually gone up, according to the American Bankers Association. The data show that 4.5 percent of credit card accounts were delinquent at the end of 2008, accounting for about 5.5% of outstanding credit-card balances. The latest figures show that the numbers are 3.9 percent and 6.4 percent, respectively.

“It means there are fewer people having problems, but those having problems have bigger balances,” is how James Chessen, the ABA’s chief economist, explains the numbers.

(Via WSJ.com)

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).

Late credit card payments in the U.S. fell to an eight-year low in the first quarter of 2010, according to data released by the American Bankers Association (ABA) on Wednesday.

The 30-day credit card delinquency rate, measuring the number of bank card accounts past due by 30 days or more, fell to 3.88 percent in the first quarter of the year, marking the first time since 2002 that the rate has fallen below 4 percent, ABA’s data revealed.

Consumer delinquencies fell in seven loan categories during the first three months of the year, improving for the third straight quarter, according to the ABA Consumer Credit Delinquency Bulletin. ABA’s composite ratio, which tracks delinquencies in eight categories of so-called closed-end installment loans, fell to 2.98 percent of all accounts in the first quarter from 3.19 percent in the prior quarter.

“It’s far from a perfect score, but we are moving in the right direction, and that’s a hopeful sign,” said James Chessen, the ABA’s chief economist. “There is a very strong link between job loss and consumer credit delinquencies,” Chessen added. “We won’t see a sustained decline in delinquencies until new jobs are created in this economy.”

(Via ABA.com)

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).

A report release today by rating agency Fitch Ratings shows that credit card delinquencies continued to decline in May, reaching their lowest level in 17 months.

“Seasonal factors are influencing the improvement in delinquencies and could benefit chargeoffs in the coming months,” said Fitch’s Managing Director Michael Dean. However, “Employment trends remain vital to any meaningful and sustained improvement taking hold.”

Late payments improved for the fifth consecutive month, the data revealed. Payments late by 60 days or more fell in May to 4.01 percent – a 17-month low – from 4.18 percent a month earlier. The 30-day delinquency rate decreased for the third straight month, dropping 26 basis points to 5.27 percent from 5.53 percent. Although the 60-day delinquency rate is still elevated, it is now below the 2009 average of 4.33 percent. A sustained decline in delinquencies – an indicator of future losses – points to lower charge-offs in the coming months.

Fitch’s prime credit card charge-off index was up three 0.03 percent 11.13 percent from the previous month and 7 percent above the year ago levels.

(Via FitchRatings.com)

Learn how to minimize chargebacks and fraud

Learn how to minimize chargebacks and reduce your processing costs. The Chargeback Management kit contains a video and an e-book:

• E-Book – Chargeback Manual (40 pages).
• Video – Card Acceptance Best Practices for Lowest Processing Costs (18 min).