Synchrony Financial Credit Card Deliquency Rate Up to 3.1% in August

Synchrony Financial on Monday (Sept. 12) reported a rate of credit card delinquencies as a percentage of receivables of 3.1% for August, the highest level in at least a year, in a filing with the Securities and Exchange Commission.

The rate applies to credit card payments that are more than 30 days overdue.

Synchrony also reported an increase in its net charge-off rate for August to 3.1%.

Lenders usually report credit card obligations as charge-offs when borrowers fail to make payments for six months.

The company reports the figures to the SEC regularly.

The 30-day receivable rate is the highest since January 2021 and the charge-off rate is the highest since June 2021, according to SEC filings.

Synchrony, based in Connecticut, has more than 18,000 employees and 72.4 million customer accounts, according to the company’s marketing materials.

Since 1991, the peak credit card delinquency rate nationwide reported by the Federal Reserve System, which tracks the information, was 6.77% in 2009 in the immediate aftermath of the Global Financial Crisis. The nationwide rate reported by the Fed for the second quarter of 2022 was 1.81%.

CNBC said that for July, Goldman Sachs reported a July delinquency rate of 2.93%.

Experts quoted by CNBC attributed the rise in delinquencies to pockets of unemployment and the highest inflation pace in decades. One challenge cited for Goldman Sachs is that it backs Apple Credit Cards, and some of those cards tend to be issued to borrowers with relatively low credit scores.