Credit card delinquency rate inches toward prepandemic levels in September

Credit card delinquency rates continued to slowly climb toward prepandemic levels in September, according the the average of seven banks monitored by Seeking Alpha. The average rate of 2.13% rose from 2.05% in August and from 1.89% in July.

For some perspective, though, the average delinquency rate was 2.83% in September 2019, before COVID-19 prompted massive fiscal relief programs that led to the ultra-strong credit measures since then.

The biggest month-over-month jump in delinquency occurred at Bread Financial (NYSE:BFH), which saw a 40 basis point increase to 5.7%, followed by Capital One (NYSE:COF), which saw a 21 bp boost, and Synchrony Financial (NYSE:SYF), with a 20 bp increase.

The average net charge-off rate, though, took a breather from increasing in September. That average rate of 2.09% slipped from 2.13% August, but still was higher than 2.02% in July. By comparison, the average net charge-off level three years earlier was 3.43%.

The biggest increase in net charge-offs for the month, was Capital One (COF), with a 21 bp rise to 2.23%. Meanwhile, charge-off rates fell at three of the banks in the list, with Bread Financial (BFH) seeing its NCO fall 30 bps and Synchrony (SYF) registering a 10 bp dip.

Looking back to 2019, Bread Financial's (BFH) credit metrics are the closest to its prepandemic level. Delinquency rate of 5.7% in September 2022 compares with 5.9% three years earlier. NCO rate of 5.0% compares with 5.3% in 2019.

			2022
Company	Ticker	Type	September	August	July	3-month average
Capital One	COF	delinquency	2.97%	2.76%	2.56%	2.66%
		charge-off	2.23%	2.02%	2.36%	2.19%
American Express	NYSE:AXP	delinquency	0.90%	0.80%	0.70%	0.75%
		charge-off	0.80%	0.80%	0.80%	0.80%
JPMorgan	NYSE:JPM	delinquency	0.69%	0.66%	0.66%	0.66%
		charge-off	1.15%	1.15%	1.02%	1.09%
Synchrony	SYF	delinquency	3.30%	3.10%	2.90%	3.00%
		adjusted charge-off	3.00%	3.10%	3.00%	3.05%
Bread Financial	BFH	delinquency	5.70%	5.30%	4.80%	5.05%
		charge-off	5.00%	5.30%	4.50%	4.90%
Citigroup	NYSE:C	delinquency	0.85%	0.82%	0.79%	0.81%
		charge-off	1.12%	1.33%	1.19%	1.26%
Bank of America	NYSE:BAC	delinquency	0.92%	0.88%	0.85%	0.87%
		charge-off	1.31%	1.24%	1.27%	1.26%
		Avg. delinquency	2.19%	2.05%	1.89%	2.08%
		Avg. charge-off	2.09%	2.13%	2.02%	2.04%

Note that Discover Financial (DFS) doesn't report monthly credit metrics for the last month of each quarter. For Q3, the company reported credit card delinquency rate of 2.11%, up 35 basis points from the prior quarter, and its net charge-off rate of 1.92% fell 9 basis points from the prior quarter.

Earlier in the month, SA contributor Seeking Profits put a Conviction Buy on Capital One (COF), saying consumer credit fears are overblown