Last updated on April 6th, 2023
Consumer spending appears to be shifting after COVID-19. Instead of paying off debt at record levels, consumers now appear to be adding debt, with some issuers experiencing a slight rise in credit card delinquency rates and charge-offs. Here’s what you need to know:
Bank of America Credit Card Delinquency Rates Rise in October
Bank of America’s credit card delinquency rates rose slightly from its three-month moving average in September and October. The delinquency rate for Bank of America credit cards rose to 0.93% in October, slightly above the three-month rolling average of 0.91%.
While a rise in delinquency rates appears problematic, the 0.93% rate is significantly below 2020 levels. The same period last year (October 2020) saw a rate of 1.36% – as consumers felt the full impact of the coronavirus pandemic.
Other Issuers Also Seeing Delinquency Rate Increases
Bank of America isn’t the only card issuer experiencing a rise in delinquency rates. JP Morgan Chase also saw a slight increase, with an October rate of 0.65% – a tick up from 0.64% in September, though still well-below the 1.00% rate in October 2020.
Other notable credit card issuers experiencing a rise in delinquencies according to investor resource, Seeking Alpha, include:
- Discover: A rate of 1.55% in October 2021, compared to 1.48% in September and 1.99% in October 2020.
- American Express: A rate of 0.6% in October 2021, compared to 0.4% in September and 2.2% in October 2020.
- Synchrony: A rate of 2.5% in October 2021, compared to 2.4% in September and 2.8% in October 2020.
Not All Bad News
Fortunately, it’s not all bad news for issuers, with Capital One seeing a slight decrease in delinquencies in October. The card issuer saw a drop in its delinquency rate of 1.04% in October 2021, compared to 1.48% in September 2021, and 1.99% in October of last year.
The news of slight increases in delinquency rates and charge offs also comes amidst a rise in consumer spending and credit card balances. According to the National Mortgage Professionals group, “this apparent rise in consumer spending and credit card balances reflects a shift from COVID-19 economic behavior when most people scaled back spending and substantially paid down debt.”
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