Capital One Credit Card Defaults Rise; Shares Fall Topics:Banking Sectors:Financial Services | Banks By: Reuters | 15 Apr 2009 | 09:26 AM ET Capital One Financial, a leading issuer of MasterCard and Visa credit cards, said U.S. credit card defaults rose in March as unemployment soared, sending its shares lower. Capital One AP In a regulatory filing Wednesday, the company said the annualized net charge-off rate for U.S. credit cards -- debts the company believes it will never collect -- rose to 9.33 percent in March from 8.06 percent in February. The rate for loans at least 30 days delinquent fell slightly, to 5.08 percent from 5.1 percent. After calendar adjustments, Capital One said the U.S. card charge-off rate rose to 9 percent in March from 8.38 percent in February, while the delinquency rate was unchanged at 5.07 percent. The default rate is getting close to the results reported last month by American Express and Citigroup, two companies with some of the worst-performing credit card portfolios. In auto loans, Capital One's charge-off rate fell to 4.08 percent in March from 4.44 percent in February, while the delinquency rate was stable at 7.52 percent. In international operations, the charge-off rate rose to 8.67 percent in March from 7.20 percent in February, while the delinquency rate rose to 6.25 percent from 6.16 percent. In January, Capital One posted a quarterly loss after writing down the value of its auto finance business and setting aside more money to cover bad loans. Last month it cut its quarterly dividend by 87 percent to save $500 million annually. Capital One, due to report its first-quarter results next week, forecast more credit losses this year as debt-burdened American consumers struggle with unemployment, which hit a 25-year high in March. The bank's shares fell more than 8 percent in early morning trading. The shares are down almost 50 percent this year but have more than doubled in price in the past month, coming off a 13-year low. Capital One once specialized in credit cards but expanded into branch banking in recent years by acquiring Hibernia and North Fork Bancorp. In February it acquired Chevy Chase Bank, expanding its presence in the affluent suburbs of Washington, D.C.
Everyone should stop paying back debts, break all the banks and start over with a new banking system. Financial crisis solved. Just a bit of warfare in between.
i love cof. i have one of their airline credit cards. in 2 years i ran up a $1400 airline ticket credit and i have never paid them a dime in interest. taking a trip next week to use it up just incase they go bk on me.