The Best Credit Cards Rated According to Default and Delinquency

Three among the best credit cards are reported to have low rates in card default and delinquency. The report was disclosed according to the mixed results of the regulatory filings made by the major credit card companies for January 2012.


    1. American Express Company
    2. Bank of America Corp.


  • Discover Financial Services

recorded low credit card defaults.

On the other hand, JP Morgan, Citigroup Inc., and Capital One surged on their defaults.

The Facts Disclosed from the Report

The Best Credit Cards - Default and Delinquency RatingsThe following are some facts in rating the best credit cards in terms of default and delinquency.

Credit card companies commonly write-off loans that are 180 days past due, and considered them as uncollectible. With the Bank of America, the net charges-off rate on a per annum basis fell to about 5.63-percent in January 2012 comparing with that of December 2011, 6.05-percent and in January 2011, 9.2-percent.

The NCO rate of Capital One shoot from 3.98-percent in the prior month, but lowered from 6.79-percent in the prior-year month, towards 4.08-percent in January 2012.

In the same manner, JP Morgan was reported with a rise of NCO rate in January 2012 to 4.25-percent on the total loan balance, comparing with 4.11-percent during December 2011 and 5.97-percent in January 2011.

The report stated that in January 2012, the corresponding delinquent rate that indicates the future rate of default has dropped for JP Morgan, Bank of America and Discover Financial.

Citigroup and Capital One exhibit an increase, but American Express posted no change since December 2011.

The delinquency rate of the Bank of America on an annualized basis for thirty days or more slipped from 3.82-percent in December 2011 and 5.17-percent in January 2011 to 3.80-percent.

On the same way, the delinquency rate of JP Morgan on a per annum basis for thirty days or more slightly fell to 2.45-percent, comparing with 2.48-percent in December 2011 and 3.39-percent in January 2011.

In contrast, the delinquency rate of Capital One on a per annum basis for thirty days or more was 3.78-percent in January 2012, which is up from 3.66-percent in December 2011, but fell from 4-percent in January 2011.

The Conclusion

The decline of the default rates among the best credit cards was due from the incapability of defaulting cardholders in getting cards having huge credit limits.

Otherwise, the declining trend of default signifies that the card owners have an improving financial condition.

These card holders are experiencing gradual recovery from the effects of recession, and trying very much in reducing their credit card debts.

Also, with the various reform regulation applied by the Federal Reserve that include the limitation on fees banks can charge as well as restraining their ability to raise interest rates enables the card holders in bringing down their credit balances.

It is the understanding of the authorities that the whole credit quality is bound to improve. However, the improvement would not be immediate because of the slow economic recovery.

The current #1 ranking among the best credit cards is given to Discover Financial, followed by JP Morgan, Capital One, Bank of America, Citigroup and American Express.