Credit card delinquencies are on the rise — Business Insider Deutschland

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Delinquencies are on the rise for a number of major credit card lenders, including Capital One Financial, Synchrony Financial, and Alliance Data Systems, according to The Wall Street Journal.

The percentage of loans over 30 days delinquent in Capital One’s domestic card portfolio was up to 4% in August, from 3.5% in April. And this is a trend across the board — over the same period, Synchrony’s delinquencies rose to 4.5%, from 4.1%, and Alliance Data’s increased to 5.3%, its highest rate since 2011, from 4.7%.

It’s important to mention that, as household debt continues to increase in the US, even the smallest percentage increase in delinquencies will become magnified. The Federal Reserve Bank of New York published a study that revealed total household debt in the US has reached levels past recessionary highs — total household debt in the US climbed to $12.8 trillion in Q2 2017, surpassing the $12.7 trillion reached in Q3 2008.

Given the magnitude of these loans, delinquencies increasing from 3.5% to 4% could potentially result in the loss of millions. As a result, credit card firms may need to rethink their strategies, which up until this point helped them increase adoption and usage of their products in the post-recession climate. 

To stay ahead of this negative trend, credit card lenders will have to become stricter with their qualifications in order to decrease risks. Firms like Synchrony and Alliance Data specialize in store cards, which tend to come with lower qualifications that may attract less creditworthy borrowers. To put this in context, 26% of Synchrony’s cards went to borrowers with credit scores below FICO 660, compared to just prestamos rapidos con asnef online (blog) 18% for Discover and 14% for Chase, according to The Wall Street Journal.

This could potentially be done by using advanced data technology, such as machine learning, to narrow down what qualifications are needed to give the highest number of consumers an opportunity to adopt a card without increasing the risk of delinquencies.  

Digital disruption is rocking the payments industry. But merchants, consumers, and the companies that help move money between them are all feeling its effects differently.

For banks, card networks, and processors, the digital revolution is bringing new opportunities — and new challenges. With new ways to pay emerging, incumbent firms can take advantage of solid brand recognition and large customer bases to woo new customers and keep those they already have.

And for consumers, the digital revolution is providing more choice and making their lives easier. Digital wallets are simplifying purchases, allowing users to pay creditos rapidos online sin aval with only a username and password and in-store with just a swipe of their thumb. 

Dan Van Dyke, senior research analyst for BI Intelligence, Business Insider’s premium research service has written a detailed report that explores the digital payments ecosystem today, its growth drivers, and where the industry is headed. The report also: 

Traces the path of an in-store card payment from processing to settlement across the key stakeholders.  

Forecasts growth and defines drivers for key digital payment types through 2021.

Highlights five trends that are changing payments, looking at how disparate factors, such as surprise elections and fraud surges, are sparking change across the ecosystem.

To get the full report, subscribe to an ALL-ACCESS Membership with BI Intelligence and gain immediate access to this report AND more than 250 other expertly researched deep-dive reports, subscriptions to all of our daily newsletters, and much more. >> Learn More Now

You can also purchase and download the report from our research store.

Learn more:

Credit Card Industry and Market

Mobile Payment Technologies

Mobile Payments Industry

Mobile Payment Market, Trends and Adoption

Credit Card Processing Industry

List of Credit Card Processing Companies

List of Credit Card Processing Networks

List of Payment Gateway Providers

M-Commerce: Mobile Shopping Trends

E-Commerce Payment Technologies and Trends

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