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Credit card lenders saw delinquencies decline slightly in February, while net charge-offs continued to rise, according to data from eight companies compiled by Seeking Alpha.
The average delinquency rate of 3.20% increased from 3.24% in January and 2.59% in February 2023.
The average figure has risen moderately above the 2.85% level in February 2020, before the pandemic shook the US economy. In four of the companies: American Express (New York Stock Exchange: AXP), JPMorgan Chase (New York Stock Exchange: JPM), Citi group (New York Stock Exchange:C), and Bank of America (New York Stock Exchange: BAC) — delinquency rates remain below their pre-pandemic levels in February 2020.
Meanwhile, the average net amortization rate of 4.44 increased from 4.21% in January and 3.24% in February 2023. That is an increase from 3.83% in previous times of February 2020 .
Jefferies analyst John Hecht notes that the seasonal decline in credit card delinquencies in February was weaker than normal, while net charge-offs (NCOs) rose a little more than normal .
“The year-on-year percentage change in DQs (delinquencies) improved -9 bps compared to the previous month, an important trend that must continue to gain momentum in the coming months for the peak NCO cycle to manifest in 2H24, a factor that “many are considering. We are planning at this time,” Jefferies analyst John Hecht said in a note to clients.
Loan balances at lenders Hecht covers fell 1.4% month-on-month to $480 billion, in line with historical trends in February and up 10% year over year. “Issuers have tightened credit, given the current macroeconomic situation, and should expect much weaker credit growth in 2024,” he said.
“The month's payment rates also point to slower loan growth going forward.”
Payment rates are a leading indicator of loan growth, so we will closely monitor this metric,” Hecht wrote. “We expect prepayment rates to remain elevated in 2024, resulting in loan growth Slower”. 
