Credit Card Default Rose in January
Capital One Financial‘s U.S. credit-card defaults rose in January, in a sign that consumers continue to remain under stress, it said in a regulatory filing.
Capital One [JPM 39.05 0.10 (+0.26%)] said the annualized net charge-off rate—debts the company believes it will never collect—for U.S. credit cards rose to 10.41 percent in January from 10.14 percent in December.
Accounts at least 30 days delinquent—an indicator of future loan losses—were up marginally to 5.80 percent from 5.78 percent.
For U.S. auto loans, Capital One’s charge-off rate was 4.27 percent in January, down from 5.68 percent in December, and the delinquency rate fell to 9.61 percent from 10.03 percent.
In credit card international operations, including Canada and Britain, the charge-off rate fell to 9.03 percent from 9.58 percent, while the delinquency rate rose to 6.66 percent from 6.55 percent.
Capital One routinely kicks off the monthly reporting of credit card charge-offs. JPMorgan Chase [JPM 39.05 0.10 (+0.26%) ], Bank of America [BAC 14.69 0.24 (+1.66%) ], Citigroup [C 3.24 0.06 (+1.89%) ], American Express [AXP 38.85 0.43 (+1.12%) ] and Discover Financial Services [DFS 13.165 0.135 (+1.04%)] are expected to report the monthly performance of their credit card portfolios on Tuesday.
Capital One shares edged higher in premarket trading.