The percentage of Americans falling behind on credit card bills stabilized in January, according to data from five lenders on Tuesday, signaling that U.S. consumer credit woes may be leveling off.
Credit card company shares rose on the news, which signals the worst for U.S. consumers may have already past.
American Express Co., Bank of America Corp., Capital One Financial Corp., Discover Financial Services and JPMorgan Chase & Co. all posted credit card loan delinquency rates for January little changed from December.
Delinquency rates signal how likely credit card issuers are to have to write off bad loans in the future.
For Capital One, borrowers with about 5.8 percent of U.S. credit card loans were more than 30 days behind on their bills in January, on an annualized basis. That is essentially unchanged from December's 5.78 percent.
In January, write-offs were mixed. Capital One and JPMorgan Chase wrote off a higher percentage of loans, while American Express, Bank of America and Discover wrote off a lower percentage.
JPMorgan Chase wrote off 10.91 percent of its loans, on an annualized basis, a big increase from December's 7.11 percent.
The company said in January that write-offs could approach 11 percent, due to a payment holiday it allowed customers in May, which lowered defaults in late 2009 and are boosting them now.
Capital One 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.
© 2022 Thomson/Reuters. All rights reserved.