Credit Card Issuers Report Improved Credit Quality Amidst Declining Balance Growth

U.S. credit card issuers reported improved credit quality in July, extending their decline in delinquency rates for a record 21st consecutive month.

The year-over-year decline in net charge-off rates averaged 46 basis points across the industry, according to BTIG, while Wolfe Research noted an 8-basis point improvement from June.

Bread Financial led the pack with a significant drop in net charge-offs and delinquencies, followed closely by Capital One. American Express, however, stood out as the outlier, with its net charge-off rate increasing 30 basis points month-over-month to 1.70%.

Industry balance growth decelerated across all four issuers, with each company tracking below their respective third-quarter consensus estimates.