U.S. consumers are taking on more card debt than has been seen in years.
And in recent weeks, filings by several big banks show that the general trend of delinquencies and charge-offs has been, with some volatility … up and to the right.
As reported by PYMNTS last month, as of the end of the second quarter, 9.1% of credit card balances and 8% of auto loan balances have transitioned into delinquency over the past year. The Fed’s data shows that the “flow” of credit card debt that transitioned into “serious” delinquencies stood at 7.2% in the most recent quarter, up from about 5.1% in the second quarter of last year. Card delinquency rates thus remain “elevated,” the Fed said.
PYMNTS Intelligence’s own data indicate that more than 40% of consumers revolve their debt each and every month, and the tally increases to 51% for those consumers living paycheck to paycheck with issues paying their monthly bills.
Citi’s monthly trust data shows that, as filed with the Securities and Exchange Commission, and through its Credit Card Issuance and Trust Financials, the delinquencies at 30+ days was 1.5% in August, up from 1.4% in June.
This SEC filing from Bank of America showed a ticking up of the card portfolio’s delinquency rate, where the 30-59 day rate was 0.4% at the end of August, and was 0.39% in May. The total receivables delinquent, as a percentage, was 1.42% vs. 1.38% in May. Total charge-offs as a percentage of the principal outstanding was 2.9% in August, up from 2.8% in the previous month.
The Chase Issuance Trust net charge-off rate was 1.64% last month, up from 1.51% in July. The delinquency rate was 0.84%, basically flat with the most recent reading.
There was some input from the card giants too:
Discover Financial Services noted it its own financials filed with the regulators that the net principal charge-off rate was 5.2% at the end of August this year, where that rate had been 4.2% a year ago. The delinquency rate, for 30+ days, was 3.8%, and had been 3.2% at the same period last year, and as low as 2.2% in the fall of 2022.
Amex’s SEC filing shows there was actually some improvement in several credit metrics, as the net write-off rate of the principal loan book for consumer cards stood at 2.2% in August, which was down from the 2.3% seen in June.
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