Capital One Credit Card defaults drop in April

On Monday, Capital One Financial Corp. said they wrote off the lowest rate of credit card debt since 2007.

According to Capital One and this BusinessWeek article, their “U.S. credit card charge-offs, or the balances written off after they were six months late, fell to $224 million, or 4.97 percent, of balances on an annualized basis. That was down from $248 million, or 5.87 percent, in March, and the first time since late 2007 the rate was below 5 percent”.

It’s important that people are paying their bills on time. It shows that we are growing as credit card users and learning from the past mistakes. Although most people that had better credit conitnue to improve this average, we still have a long way to go for the people that defaulted during the down period. Those people are considered the riskest consumers to lend too and will take a little time before credit card issuers are comfortable to lend to them again.