Discover, Capital One charge-offs fall

By Reuters
Posted July 15, 2010 at 8:47 a.m.

Credit card charge-offs and delinquencies improved at Capital One Financial Corp and Discover Financial Services in June as fewer Americans fell seriously behind on credit card payments. The companies said Thursday that their credit card delinquency rates in June fell to the lowest levels this year. Delinquencies are a sign of future losses.

Discover said in a regulatory filing that its credit card delinquency rate fell to 4.81 from 4.95 in May. At Capital One, the rate inched down to 4.79 percent from 4.8 percent.

Both companies said their charge-off rates fell to the lowest levels this year. Charge-offs are debts a company believes it will never collect.

Capital One’s annualized net charge-off rate for U.S. credit cards fell to 9.28 percent in June from 9.48 percent in May. Discover’s charge-off rate fell to 8 percent from 8.82 percent.

Capital One’s U.S. auto loan charge-off rate rose to 2.72 percent in June from 1.87 percent in May. Its auto loan delinquency rate was little changed at 7.74 percent, compared with 7.75 percent in May.

For credit card international operations, including Canada and Britain, Capital One’s charge-off rate rose to 8.29 percent from 8.21 percent, while the delinquency rate fell to 6.03 percent from 6.08 percent.

Capital One usually kicks off the monthly reporting of credit card charge-offs. JPMorgan Chase & Co, Bank of America Corp, Citigroup Inc and American Express Co are expected to report the June performance of their credit card portfolios later Thursday.

Read more about the topics in this post:

Companies in this article

Discover Financial

Read more about this company »

Comments are closed.