Discover Card charge-offs rise in August after 2 months of decline; delinquencies dip
By APWednesday, September 15, 2010
Discover posts uptick in charge-offs for August
NEW YORK — Discover Card wrote off balances for nonpayment at a higher rate in August than the prior month, after seeing improvement the two prior months.
Discover said in a regulatory filing Wednesday that its net charge-offs rose in August to $128.9 million, or 7.98 percent of balances, up from 7.28 percent in July.
Card companies write off loans after they’re 180 days past due, the point at which it’s assumed the balances won’t be collected.
Banks wrote off record amounts of credit card debt in the past year as customers failed to make payments amid high unemployment. The overall rate in the second quarter rose to 10.66 percent, according to the Federal Reserve, while charge-offs typically hovered between 3 and 4 percent in the years leading up to the Great Recession.
Like other companies that reported an uptick in August charge-offs, Discover also had some positive news. Its rate of loans 30 days or more past due slipped to 4.47 percent in August, from 4.72 percent in July.
Shares of parent Discover Financial Services, based in Riverwoods, Ill., rose 11 cents, to close Wednesday trading at $15.79.
