How the Major Credit Card Companies Are Faring During Coronavirus
All banks are bracing for heavy loan losses as a result of the economic shut down caused by the coronavirus pandemic. But one type of loan category that always comes with a larger loss rate -- even under normal economic conditions -- is credit card debt. For instance, national credit card charge-offs (debt unlikely to be recovered) in 2019 were 3.7% . It may sound like a small number, but it's huge when you consider that most banks were reporting charge-off rates well below 1% up until recently.
Even the nation's largest bank, JPMorgan Chase (NYSE: JPM), only had a ratio of net charge-offs to total loans of 0.60% at the end of 2019, and the banking giant has its own credit card division . Because credit card write-offs and delinquency rates often get worse during a recession or downturn, let's see how some of the biggest credit card companies in terms of how important credit card debt is to their overall health are holding up in these precarious times. Credit card loans at Capital One (NYSE: COF), American Express (NYSE: AXP), and Discover (NYSE: DFS) make up 30%, 39%, and 65% of each company's total assets, respectively, making cards a key component of their success.
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Source Fool.com
