Bank of America is the first major credit card issuer to announce a solution that falls under the “Plain Language in Plain Sight” provision of reform laws that take effect in February. BofA, the nation’s largest bank by assets, calls it “Credit Card Clarity Commitment,” a one-page summary of customers’ rates, fees and payment information.
Credit card delinquency rates in October continued to rise, and this trend will likely lead to higher industry-wide charge-offs – loans considered uncollectible – in the coming months, said Moody’s Investor’s Service. Loans at least 30 days overdue climbed to 6.12 percent in October from 5.97 percent in September.
The mortgage delinquency rate reached a record 9.64 percent of all loans outstanding for the third quarter of this year, according to the Mortgage Bankers Association. That compares to 9.24 percent in the second quarter of this year, and 6.99 percent in the third quarter of last year.
American Express, the largest U.S. credit card company, today announced that credit card spending increased in October, compared to September – a sign that the worst is over in the long-running financial crisis.
Consumer behavior resulted in a mixed bag of results for the biggest credit card companies in September, with overall defaults falling, but late payments – referred to as delinquencies – are on the upswing.
The optimism generated by lower card default rates in July has been all but forgotten with the latest figures for August, which showed some of the highest default rates since the beginning of the current financial crisis.
Fewer people are defaulting on their credit cards, a positive sign that fewer cardholders are getting into deeper debt. Credit card defaults in July declined after five consecutive months of setting new highs.