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Defaults at Bank of America slightly higher in the month of April
[12:00:00 AM Saturday, May 28, 2011]
There was a slight increase in the number of defaults at the Bank of America in April 2011. This was revealed in a regulatory filing last Friday by Bank of America’s division for credit cards. Credit card balances at 8.25% annualized rates were written off in April as compared to 8.18% in the month of March.
Though the rate of charge offs in April remained high at Bank of America as compared to the six other major credit card lenders in the country, it was definitely much lower than the 14.53% write-offs in August 2009 by the same bank.
Most of the credit card lenders write off balances if they are unpaid for the last 6 months. Beyond this point banks assume that these balances cannot be regained from customers.
The rate of late payments reported by the bank stood at 4.52% which is the least in the last four years. The last time that delinquency rate at Bank of America was in August 2006.
Overall, consumers with Bank of America credit cards are making efforts to clear off their dues on time without any defaults. The payment habits among customers of all banks have significantly improved over the last few months. Despite this, the overall default rate still stands above 3.82% which was the lowest that was observed before the economy turned for worse.
The primary reasons for the customers to repay their credit card dues on time is that the economic recession caused a setback to their credit history which has made it impossible for most of them to avail other credit cards with higher limits. With limited resources, customers are trying hard to retain what they have in hand.
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