Amex and Bank of America Report Rising Card Delinquencies

Both American Express and Bank of America saw credit card delinquencies climb last month.

According to a recent Securities and Exchange Commission filing, American Express’ delinquency rate rose from 1.3% in October to 1.4% at the end of November, a figure that’s still below pre-pandemic levels.

Bank of America, meanwhile, reported that the delinquency rate for its bank’s BA Master Credit Card Trust II increased from 1.37% in October to 1.4% last month, a figure that — like American Express — is lower than the 1.63% level recorded in November 2019.

A third lender, Synchrony Financial, also reported a slight increase in delinquency rates, from 4.6% in October to 4.7% last month.

This year has seen America’s credit card debt balloon to $1.08 trillion, a trend driven by millennial consumers.

That’s according to figures released last month by the Federal Reserve Bank of New York, showing that credit card balances jumped by $154 billion since 2022, the largest increase since the bank began tracking the data in 1999.

“Credit card balances experienced a large jump in the third quarter, consistent with strong consumer spending and real GDP growth,” said Donghoon Lee, economic research adviser at the New York Fed. “The continued rise in credit card delinquency rates is broad-based across area income and region, but particularly pronounced among millennials and those with auto loans or student loans.”

Meanwhile, the Federal Reserve’s report on consumer credit released earlier this month showed that total credit was $5.2 billion higher in October compared to the prior month, “and that’s a significant slowdown from the $12.2 billion surge seen in September,” PYMNTS wrote.

A closer look at the details showed that revolving credit — which includes credit cards — slowed to a rate of 2.7%, a marked drop from the 4.1% growth rate in September. Non-revolving credit, a category which includes auto and student loans, rose at a 0.7% rate, falling from a 2.5% rate in the previous month.

“The data show that revolving credit held at depository institutions was up to $1.258 trillion, up from $1.254 trillion in September, while the amount held by non-financial businesses — typically retail cards — was $19.2 billion, up a bit from the $19.1 billion seen in September,” that report said.