Credit card delinquency rates in the U.S. are slowly creeping upward, Bank of America and American Express reported Monday (Oct. 17).
According to Seeking Alpha, Bank of America saw delinquency rates increase from 0.88% in August to 0.92% in September.
Meanwhile, American Express showed credit card delinquencies at 0.9% last month, up from 0.8% in August.
Bank of America’s numbers also suggest credit card users have upped spending amid raising inflation, with its credit card average principal receivables outstanding rising to $13.66 billion in September from $13.62 billion in the previous month.
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Last month, PYMNTS’ Karen Webster spoke with LendingClub CEO Scott Sanborn about the way rising credit card balances and delinquencies are contributing to America’s paycheck-to-paycheck problem.
What remains unspoken, he said, “is the way [credit card issuers] report delinquencies is on their entire outstanding percentage of delinquent loans on their outstanding portfolio. The thing about credit cards is I think the average age of the balance is between five and seven years. You have this massive amount of balance that’s old, that’s very stable.”
Although personal loan delinquencies are precisely the same as credit card delinquencies, Sanborn said that “if you look by vintage, the quarterly [credit] delinquencies are fanning like crazy, and none of them are talking about it.”
Portfolio delinquencies may look all right, Sanborn noted, but that’s a function of time and new balances which haven’t had time to hit issuers yet.
“Just compare the first six months of credit cards issued in Q2 of this year versus the first six months in any of the last 5 to 10 years,” he said. “They look remarkably worse, but nobody’s talking about it.”