Capital One, which specializes in credit cards and car loans for customers with bad credit, has reported a slight increase in its charge-off rate for the month of August.
After four months of decline, the credit card charge-off rate rose to 8.19 percent, up from 8.13 percent in July. The small uptick could signify that more Americans are struggling with debts and bad credit.
A charge-off is considered to be a debt that the company will never be able to collect, and is considered to be undesirable in the credit and lending industry.
Capital One has also branched off into car loans, which saw a similar rise in charge-offs, from 2.6 to 2.75 percent. The delinquency rate – accounts with no payments for more than 30 days – also rose to 8.04 percent from 7.72 percent.
More credit card companies are expected to report their results over the next few days. Analysts generally hope to see a decrease in delinquencies and charge-offs, as this not only represents financial solubility for the companies, but a more positive picture of consumer’s behavior overall.
Whether a driver has good or bad credit, they should know that they’re pre-approved for a car loan. They can easily compare rates by applying online.