Credit card delinquency and net loss rates, on average, returned to pre-pandemic levels for the six major US credit card issuers in the first month of 2024, as pandemic stimulus payments waned and economic activity normalized.

The average 30-plus-days delinquency rate for American Express Co., Bank of America Corp., Citigroup Inc., Capital One Financial Corp., Discover Financial Services and JPMorgan Chase & Co. in January was 1.41%, approximating the January 2020 level of 1.50%, two months before the COVID-19 global lockdown, and equal to the level way back in June 2018, according to S&P Global Market Intelligence data.

The January average delinquency rate for the six card issuers was up from 1.36% in December 2023, and from 1.05% a year ago.

Capital One, which is in a merger deal to acquire peer Discover Financial, posted the highest average delinquency rate of 2.03% in the group, as well as the highest year-over-year increase of 67 basis points.

Among the six card issuers, only Bank of America posted a sequentially lower average delinquency rate in January, but that rate still was 26 basis points higher than a year ago.

Delinquencies moving in normal seasonality

Capital One Founder, Chairman, President and CEO Richard Fairbank confidently declared that Capital One card delinquencies have "stabilized."

"Since August, our monthly delinquency rate has been moving in line with normal seasonality, and at stable ratios relative to the same month in 2018 and 2019. And at this point, we have a pretty good window into January, as delinquency entries in December indicate continuing delinquency rate stability in January," Fairbank said on Capital One's fourth-quarter 2023 earnings call.

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Net loss rates catching up to delinquencies' trend

The average annualized net loss rate for the six major US credit cards was somewhat flat sequentially, at 2.07% in January — edging lower from 2.08% at the end of 2023 — but still 77 basis points higher than a year ago. It was likewise higher than the 2.05% net loss rate recorded in October 2019 and equal to the rate way back in September 2017.

Capital One again posted the biggest average net loss rate of 2.69% and the biggest year-over-year increase of 130 basis points in January among its peers.

Fairbank said charge-offs are somehow catching up to the stabilizing trend of delinquencies at Capital One.

Portfolio yields edge lower sequentially

The gross portfolio yield edged lower for five of the six major card issuers, pushing down the average yield to 23.35% in January. But this was still higher by 78 basis points than the year-ago average yield for the group of 22.57%.

Only American Express posted a sequentially higher gross portfolio yield of 31.65% in the group. It also logged the highest year-over-year increase of 146 basis points.