cards
One of the major credit card lenders in the United States, Capital One, continued to post positive results for the month of May as well. Adding to the list of positives to the bank, the number of defaults in terms of credit card payments showed a downward trend even in the fifth month this year.
The charge-offs on credit cards at this Virginia based bank dropped to 4.84% of their overall balances, amounting to $217 million. This is a significant drop compared to 4.97% in the month of April this year that totaled to $224 million. This figure was at its peak in March 2010 when the total written off debt stood at 10.87% of the total balance.
The rate of defaults as well showed a downward trend in May. This rate that stood at 3.41% in April this year further fell to 3.32% in May. The delinquency rate at Capital One was at its peak in January 2010 when it stood at 5.8%.
The trend at Capital One is just a fraction of the entire credit card industry. As per the reports from the Federal Reserve, the rate of charge offs have fallen sharply across lenders and stood at 6.96% for the first three months of this year. This is a stark improvement as compared to 10.87% which was the rate of charge-offs in 2010’s second quarter.
Customers with credit cards have begun repaying their dues on time to improve their credit score to avail loans and cards with favorable terms. This can be one of the main contributors for the improved results posted by the major credit card lenders.
