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According to Capital One, US credit card delinquencies rose in July of 2011. However, charge-offs (loans that banks do not expect to collect) have declined for the eighth straight month. This presents a mixed bag of results for the company, which has generally done well in recent years.
Capital One’s higher delinquencies are in contrast to recent information from Experian PLC that delinquencies in the top 30 US markets as well as on a nationwide basis have declined. They are now at lower levels than before the recession. Among cities that showed the greatest improvement in this area were Riverside (CA), Cleveland, San Antonio, Dallas, Houston, Cincinnati, Tampa, Miami, Seattle, and Phoenix.
As far as the nuts and bolts are concerned, Capital One‘s delinquencies only rose by a relatively small amount. Capital One’s delinquencies of over 30 days climbed from 3.33 percent in June to 3.37 percent in July. In dollars, that was a jump from $1.8 to $1.82 billion.
As for Capital One’s charge-off statistics, their net charge-offs declined from 4.41 to 3.77 percent from June to July of 2011. The dollar value of these charge-offs declined from $198 million to $169 million over the same period. This is a sign that fewer customers are having difficulty paying off their credit card debt. This is reinforced by recent information that consumers are using credit cards more cautiously than in the past and paying their bills more aggressively.
Overall, Capital One has done fairly well during recent times, despite economic troubles in the US. It reported a 50 percent increase in second quarter earnings this year, beating analysts’ estimates. Overall, it’s stock is up 2.9 percent this year.