Bank card delinquency rates continue to fall as loans increase

Credit card delinquency rates reportedly fell in April as loan activity improved.

This is based on a Report Seeking Alpha cited data from eight different lenders on Monday (May 20). Loans stood at $497.5 billion in April, compared with $496.8 billion in March, but were up 9.2% year over year.

The report includes the following comments: Jeffries analyst John Hechthe wrote that April's credit card results reflected seasonal declines in delinquency and net charge-off rates for most credit card companies, with better-than-expected seasonal trends at Discover, Capital One and Bread.

“Delinquency rates show signs of possibly peaking in January 2024 (seasonally adjusted) Because the year-over-year growth percentage continues to decline,” Hecht wrote.

and Baird analyst David George It said U.S. consumer credit indicators were “somewhat mixed,” but overall showed “healthy trends, with spending/borrowing growth slowing slightly.” However, we remain cautious on card names as soft landing expectations appear to be priced in and the risk/reward does not appear to be attractive.

As PYMNTS wrote earlier this month, consumers entered this year relying heavily on credit cards. Research from PYMNTS Intelligence shows 31% of consumers Their credit card limits reportedly averaged $9,200, at least occasionally during the past year.

“That sharing more than doubled For consumers living paycheck to paycheck, there are problems with their monthly bills, the report said.

“Nearly two-thirds of this group said they have reached their credit card limit, an average of $5,900, at least occasionally over the past 12 months.”

Meanwhile, PYMNTS looked at digital wallet usage last week Card Center80% of consumers said they would use digital wallets to implement a range of functions.

“In recent months, the situation has changed Card consumption “(Debit cards are gaining momentum), the number of people using debit cards as a basic digital wallet payment method when buying groceries doubled last year,” the report said.

For example, the study found that debit cards accounted for 55% of younger consumers’ digital wallet grocery spending, compared with 42% of older, higher-income consumers using credit cards for retail purchases.

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