This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Credit Card Delinquency Rates Rise For First Time In 2012

Credit card delinquency rates rose for the first time in nearly a year, according to analysts at Fitch Ratings. Combined with rising unemployment figures and concerns about the long term effects of Hurricane Sandy, the report scared investors into a sell-off that affected shares of Capital One and Citi during November.

The financial research firm reported that "late stage" credit card delinquencies rose just two basis points in October. That slight upward shift was just enough to break a yearlong streak during which fewer consumers allowed their credit cards to fall more than 60 days past due. "Early stage" delinquencies remained stable, while overall charge-off rates continued to fall.

In fact, Fitch analysts report, banks have had to charge off the smallest percentage of their credit card portfolio in October since 2007. The authors of Fitch's Prime Credit Card Chargeoff Index noted that Citibank's portfolio experienced a "small blip" upwards in its charge-off measurement. However, Fitch reported that Bank of America, Capital One, Chase, and Discover all experienced fewer defaulted credit card balances in October than in September.

Charge-off concerns shadow Capital One's recovery

Nevertheless, concerns about hurricane damage and economic recovery weighed on Citibank and Capital One, with both companies enduring declines in share prices. Capital One warned investors that its own measurement for account charge-offs had risen to 4.25 percent in October, up from 3.96 percent during the same period a year earlier.

The increase dampens an otherwise strong year for the credit card issuer, which had seen its stock value rise more than 30 percent during 2012 after remaining flat for most of the previous year. Because Capital One specializes in using its proprietary consumer database to issue credit cards for fair credit, some analysts view the firm as a bellwether for the rest of the personal lending industry.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free


Chart of I:DJI
DOW 16,472.37 +200.36 1.23%
S&P 500 1,951.36 +27.54 1.43%
NASDAQ 4,707.7750 +80.6910 1.74%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs