Three of the top six credit card-issuing banks reported declines in default rates, and four reported drops in delinquencies. The others reported small upticks in both, but the mixed reports point to a steady decline in defaults and delinquencies overall.
Citigroup reported a drop in delinquencies by 2.8 percentage points from 6.06% in March 2010 to only 3.26% today. Discover Financial Services reported delinquencies on only 2.4% of balances its lowest rate since December 2006. Industry-leader American Express Co. reported a 0.01 percentage point uptick in its delinquency rate to 1.5%, but that was still much lower than it reported in early 2007.
American Express also reported the lowest default rate in the business, 2.7%, while Discover reported 3.26%, and Capitol One Financial Corp. reported 3.96%. All the other major issuers reported higher rates, including Bank of America (5.98%), Citibank (5.66%) and Chase (4.18%) but those rates were only half of what they were a year and a half ago.
The results seem to have broken the downward trend, a sign that customers may be returning to more normal seasonal patterns that preceded the 2008 Financial Meltdown.