Capital One Charge-Off Rate Shoots Higher
Credit card companies are under pressure today as more negative trends in charge-off and delinquency rates are noted across the board. The main pure play credit card name that most follow for representative trends in the space, Capital One, released data that showed materially deteriorating numbers in both the US general annualized charge-off rate (9.77%, a significant increase from 9.32% in August), and the 30 day + delinquency rate (5.38% versus5.09% in August). Auto finance and international metrics were also broadly worse month over month. Hopefully consumers are at least using their credit cards to purchase highly discounted clothing instead of funding their E-trade accounts with margin^2. The last, which seems to be the prevalent strategy in game-fever swept China, may not be the most prudent approach in a suddenly savings-focused America.
September COF data:
August COF data: