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Card Issuers' Delinquencies & Charge-Offs Decline in April
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The U.S. credit card delinquency as well as charged off rates declined in April 2021 for all major issuers. The trend seems to be driven by the huge stimulus package and tax refunds. These are enabling customers to remain current on their payments.
Details
Bank of America’s (BAC - Free Report) delinquencies declined to 1.17% in April from March’s 1.31%, while charge-off rate of 2.33% was down from 3.17%. Also, JPMorgan’s (JPM - Free Report) delinquency rate of 0.78% fell from the prior month’s 0.89%. Further, its rate of losses on credit card loans decreased 6 basis points (bps) in April to 1.97%.
Likewise, another major credit card issuer, Capital One’s (COF - Free Report) charge-off rate inched down to 2.40% from 2.41% in March, while delinquency rate fell 32 bps to 1.92%. Similarly, for Citigroup (C - Free Report) credit card charge-off rate decreased 42 bps to 2.07% in the reported month, while its delinquency rate fell 14 bps from the prior month to 1.12%.
Further, Synchrony Financial’s (SYF - Free Report) adjusted charge-off rate was down 10 bps to 3.70% in April. Also, the company’s core delinquencies declined 40 bps to 2.40%.
Moreover, Discover Financial’s (DFS - Free Report) delinquency rate decreased to 1.69% in the reported month from 1.85% in March, while its charge-off rate fell 16 bps to 2.55%. Additionally, American Express’ (AXP - Free Report) rate of delinquencies and charge off rates were down 10 bps each to 0.80% and 1.00%, respectively.
Our Viewpoint
With the stimulus payments and economic recovery continuing to help consumers in lowering their credit card debts, there is less chance that net charge-offs and delinquency rates will rise substantially in the near term. Thus, this will keep supporting banks’ asset quality to a great extent.
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Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
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Card Issuers' Delinquencies & Charge-Offs Decline in April
The U.S. credit card delinquency as well as charged off rates declined in April 2021 for all major issuers. The trend seems to be driven by the huge stimulus package and tax refunds. These are enabling customers to remain current on their payments.
Details
Bank of America’s (BAC - Free Report) delinquencies declined to 1.17% in April from March’s 1.31%, while charge-off rate of 2.33% was down from 3.17%. Also, JPMorgan’s (JPM - Free Report) delinquency rate of 0.78% fell from the prior month’s 0.89%. Further, its rate of losses on credit card loans decreased 6 basis points (bps) in April to 1.97%.
Likewise, another major credit card issuer, Capital One’s (COF - Free Report) charge-off rate inched down to 2.40% from 2.41% in March, while delinquency rate fell 32 bps to 1.92%. Similarly, for Citigroup (C - Free Report) credit card charge-off rate decreased 42 bps to 2.07% in the reported month, while its delinquency rate fell 14 bps from the prior month to 1.12%.
Further, Synchrony Financial’s (SYF - Free Report) adjusted charge-off rate was down 10 bps to 3.70% in April. Also, the company’s core delinquencies declined 40 bps to 2.40%.
Moreover, Discover Financial’s (DFS - Free Report) delinquency rate decreased to 1.69% in the reported month from 1.85% in March, while its charge-off rate fell 16 bps to 2.55%. Additionally, American Express’ (AXP - Free Report) rate of delinquencies and charge off rates were down 10 bps each to 0.80% and 1.00%, respectively.
Our Viewpoint
With the stimulus payments and economic recovery continuing to help consumers in lowering their credit card debts, there is less chance that net charge-offs and delinquency rates will rise substantially in the near term. Thus, this will keep supporting banks’ asset quality to a great extent.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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