May sees continued improvement in credit card payments

Back in April, this blog touched upon the news of declining rates of overdue or unpaid credit card payments, noting that such data may indicate greater payment stability and, in a way, be good news for POS credit card processors. If so, the news continues to be good, with the month of May also showing signs of low delinquencies, according to the Wall Street Journal. This includes major credit card companies like Capital One and Bank of America, who are also reportedly seeing a decline in "uncollectible" loans as well.

Though in some cases the difference over the course of the month appears small, it seems to represent a continuation of this trend. For example, while The Journal reports that Discover only saw a .1 percent change in its delinquencies, Capital One's reportedly fell a large r.17 percent. And Capital One's uncollectible loans were seen to drop more than .40 percent.

The Journal also quoted Citigroup analyst Donald Fandetti in explaining the larger reasons for this decrease in tardy payments, which seems to be soldiering on despite some skepticism that this will continue.

"People default on their cards when they lose their jobs, and there's modestly better job creation and the unemployment rate has been stable to down, so it could go on for a while," he said.

Whether timely credit card payments become even more prevalent in the next few months or not, merchants can keep an eye on the rates attached to specific cards and the customers that use them as a sign of the strength of these particular institutions.

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