NEW YORK—As consumers lean more on credit cards to fight inflation, delinquencies and charge-offs are rising.
Charge-offs and delinquencies rose for all six major U.S. card issuers in October, S&P Global reported.
S&P Global said trend is expected as credit normalizes after stimulus aids wane and people come out of pandemic lockdowns.
“Delinquency and charge-off rates were still well below pre-pandemic levels as consumers continue to show resilience despite inflation, high interest rates and a looming economic recession,” S&P Global stated.
All six major card issuers tracked by S&P Global Market Intelligence posted higher charge-off rates in October, both sequentially and year over year. American Express, Bank of America, Capital One, Citigroup, Discover and JPMorgan Chase posted an average credit card annualized net loss rate of 1.15% in October, up from 1.04% in September and 0.90% in October 2021.
Half of 2020 Rate
“However, the October figure was about half of the 2.32% recorded in February 2020, just before the pandemic was declared March 12, 2020. Capital One posted the biggest year-over-year increase, of 48 basis points, in charge-off rates in October, followed by Citigroup with 32 basis points. American Express had the slightest year-over-year increase of 11 basis points,” S&P Global said.
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