Credit card charge offs — loans banks assume they won’t collect — are a nice indicator of how weak or strong consumers can be. When credit card companies are allotting tons of cash to charge-offs, they are seeing weak payment flow from borrowers.
On a positive note, Capital One Financial (NYSE:COF) said charge-offs declined for the third straight month at the credit card company endorsed by vikings. Net charge-offs in February declined to 5.91% from 6.79% in the US and international rates declined to 5.42% from 5.72%. 30-day delinquencies dropped to 3.83% from 4% in the US, but rose to 5.79% from 5.73% internationally.
Auto-finance charge-offs dropped to 1.97% from 2.62%. The auto-loan 30-day delinquency rate slid to 6.51% from 7.86%.
Citigroup (NYSE:C) maintains its Buy rating and $55 price target. Shares of Capital One Financial are up ~3% in a down market.