Three out of five U.S. companies on Friday reported declines in December U.S. credit card charge-offs, suggesting stress may have eased on consumers through the holiday shopping season.
Delinquency rates, which portend future credit card defaults, slipped at all of the companies except JPMorgan Chase, according to regulatory filings. Shares of the five companies slipped amid a broad drop in financial stocks.
JPMorgan , the top issuer of Visa-branded credit cards, said charge-offs fell to 7.11 percent last month from 8.81 percent in November. Discover Financial Services said charge-offs dropped to 8.68 percent from 8.98 percent.
American Express , the largest U.S. credit card company by purchase volume, logged its seventh straight monthly decline. Defaults dropped to 7.10 percent in December from 7.60 percent in November, the company said.
Bank of America and Capital One Financial , however, reported jumps in December credit card charge-offs — debts companies believe it will never collect — continuing a broader trend seen in November.
Bank of America had the highest default and delinquency rates of the five companies. The biggest U.S. bank said charge-offs rose to 13.53 percent in December from 13.00 percent in November, reversing a 3-month decline.
Capital One said charge-offs for U.S. credit cards rose to 10.14 percent in December from 9.60 percent in November, logging the second-highest rate of the five companies.
However, credit card accounts that were at least 30 days delinquent fell to 5.78 percent from 5.87 percent at Capital One, the third-largest U.S. issuer of Visa-branded credit card and the fifth-largest issuer of MasterCard-branded cards.
Bank of America's credit card delinquencies fell to 7.44 percent last month from 7.69 percent in November. The monthly delinquency rate dropped to 3.70 percent in December from 3.90 percent at American Express , and to 7.44 percent from 7.69 percent at Capital One.
Discover Financial said in a filing its delinquency rate dropped as well, to 5.49 percent last month from 5.65 percent in November.
However, JPMorgan reported a slight rise in delinquencies, to 4.94 percent from 4.90 percent in November. Its shares fell 2 percent after the big bank reported deep fourth-quarter loan losses, prompting a sell-off in shares of other financial institutions as well.
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