Credit card delinquency rate nears pre-pandemic levels in September (NYSE:AXP)

Credit card delinquency rates continued to slowly climb toward pre-pandemic levels in September, according to the average of seven banks monitored by Seeking Alpha. The average rate of 2.13% fell from 2.05% in August and 1.89% in July.

For some perspective, however, the average delinquency rate was 2.83% in September 2019, before COVID-19 triggered massive tax relief programs that have led to ultra-strong credit measures since then .

The largest month-over-month increase in delinquency occurred at Bread Financial (New York stock market :BFH), which rose 40 basis points to 5.7%, followed by Capital One (New York stock market :COF), which gained 21 basis points, and Synchrony Financial (New York stock market :SYF), with an increase of 20 basis points.

The average net imputation rate, however, took a break after rising in September. That average rate of 2.09% slipped from 2.13% in August, but was still above 2.02% in July. By way of comparison, the average net level of imputation three years earlier was 3.43%.

The largest increase in net charges for the month was Capital One (COF), up 21 bps to 2.23%. Meanwhile, write-off rates fell at three of the banks on the list, with Bread Financial (BFH) seeing its NCO drop by 30 bps and Synchrony (SYF) registering a decline of 10 bps.

In 2019, Bread Financial’s (BFH) credit metrics are closest to its pre-pandemic level. Delinquency rate of 5.7% in September 2022 against 5.9% three years earlier. NCO rate of 5.0% compared to 5.3% in 2019.

2022
Company Teleprinter Type September August July average over 3 months
Capital one COF delinquency 2.97% 2.76% 2.56% 2.66%
dampen 2.23% 2.02% 2.36% 2.19%
American Express New York stock market :AXP delinquency 0.90% 0.80% 0.70% 0.75%
dampen 0.80% 0.80% 0.80% 0.80%
JP Morgan New York stock market :JPM delinquency 0.69% 0.66% 0.66% 0.66%
dampen 1.15% 1.15% 1.02% 1.09%
Synchrony SYF delinquency 3.30% 3.10% 2.90% 3.00%
adjusted load 3.00% 3.10% 3.00% 3.05%
bread financial BFH delinquency 5.70% 5.30% 4.80% 5.05%
dampen 5.00% 5.30% 4.50% 4.90%
Citigroup New York stock market :VS delinquency 0.85% 0.82% 0.79% 0.81%
dampen 1.12% 1.33% 1.19% 1.26%
Bank of America New York stock market :BAC delinquency 0.92% 0.88% 0.85% 0.87%
dampen 1.31% 1.24% 1.27% 1.26%
Avg. delinquency 2.19% 2.05% 1.89% 2.08%
Avg. dampen 2.09% 2.13% 2.02% 2.04%

Note that Discover Financial (DFS) does not report monthly credit metrics for the last month of each quarter. For the third quarter, the company delinquency rate reported on credit cards 2.11%, up 35 basis points from the prior quarter, and its net charge rate of 1.92% fell 9 basis points from the prior quarter.

Earlier in the month, SA contributor Seeking Profits put a conviction buy on Capital One (COF), saying consumer credit fears are overblown

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