North American credit card giant Capital One saw its losses on its branded credit cards rise again in the month of December, even as delinquencies fell by a little bit. The company, based in Washington D.C., announced through a Securities and Exchange Commission filing that its net annual charge-off rate for plastic issued in the United States had climbed to ten point four percent in December, after nine point six in November. That represents the rate of all credit card loans that the company does not believe will ever be paid back, in relation to the total amount of credit issued.
Capital One, like virtually every other major credit card lender, has seen its default rate grow steadily as burgeoning unemployment and an overall trend towards diminished personal wealth both limit customers’ ability to repay their debts. It’s just a fact that people without jobs, or those slightly less fortunate souls who have been having to cope with hours and salaries being cut have a harder time meeting their monthly bills. For some households, the credit card bills have been the first weight to be thrown off their proverbial sinking ships. The company’s international default rate also edged up slightly.
In marginally better news, Capital One’s percentage of loans at least one month overdue dropped slightly in the last month of 2009 – by approximately a tenth of a point, and still staying under six percent. As delinquent loans are considered to be quiet accurate in predicting future defaults, this might just be a harbinger of better days to come.
Trackback this post & | & Subscribe to the comments via RSS Feed