The Associated Press October 17, 2011, 10:26AM ET

Capital One September card late payments up again

Capital One Financial Corp. credit card customers continued to struggle in September, as the rates for late payments rose for the fourth straight month.

The McLean, Va.-bank said in a regulatory filing on Monday that payments late by 30 days or more rose to 3.65 percent of balances on an annualized basis, up from 3.43 percent the prior month. After falling steadily throughout 2010 and the beginning of this year, the bank's delinquency rate is accelerating -- the increase in each of the last four months has been larger than it was the prior month.

In May, the delinquency rate hit a low of 3.32 percent, the lowest point the bank reported since before the Great Recession began in late 2007. The September rate remained well below the 5.8 percent Capital One posted in January 2010, when it was at its highest.

Delinquency is considered an important indicator of future default, but so far the increase in late payments has not translated into steadily higher charge-offs.

Capital One said it wrote off $175 million or 3.9 percent of balances on an annualized basis in September, down from 4.1 percent in August, according to the filing with the Securities and Exchange Commission. That was a return to a declining rate after an uptick the prior month. The default rate is far short of the peak 10.87 percent Capital One recorded in March 2010.

Capital One said the charge-off rate for its international cards in September was 5.65 percent, down from 6.21 percent in August. Late payments on international cards slipped to 5.35 percent in September from 5.36 percent in August.

In Capital One's auto loan unit, the charge-off rate rose for September fell to 1.34 percent, down from 1.94 percent. The September auto loan delinquency rate slipped to 6.79 percent, from 7.08 percent the prior month.

In morning trading Monday, Capital One shares fell $1.15, or 2.7 percent, to $40.91.


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