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Credit Card Delinquency Rates Rise in October

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 credit card delinquency 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 in delinquencies, 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 credit card delinquency rate of 1.55% in October 2021, compared to 1.48% in September and 1.99% in October 2020.
  • American Express: A credit card delinquency rate of 0.6% in October 2021, compared to 0.4% in September and 2.2% in October 2020.
  • Synchrony: A credit card delinquency 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.”

Related Article: Half of Americans Store Financial Information Online

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About: Cory
Cory Santos

Cory is BestCards.com's "Jack of all trades" and resident credit expert, covering all facets of the credit card space. Cory holds academic degrees in both the U.S. and U.K. In addition to credit cards, Cory finds that jogging, cats, and memes are essential parts of a balanced day.

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