Credit card defaults at Capital One rose to 9.41% in May

As hundreds of Americans lost their jobs and struggled to make both ends meet and pay their debts credit card defaults of Capital One increased sharply in May as reported by the company on Monday. Defaults increased despite new rules adopted by MasterCard and Visa which now waits longer to declare the debts of bankrupt customers uncollectable.

According to a regulatory filing of Capital One the annualized net charge-off rate for U.S. credit cards increased to 9.41% in May from 8.56% a month ago. The company said the accounting change had improved its charge-off rate by 50 basis points. Excluding the change, defaults would have been close to 10%.

However, the rate for credit cards at least 30 days delinquent -- an indicator of future loan losses -- fell to 4.90% from 5.04%. For U.S. auto loans, Capital One's charge-off rate rose to 3.62% in May from 3.46 % in April, while the delinquency rate increased to 8.59% from 7.81%. In international operations, including Canada and Britain, the charge-off rate for all loans went up to 9.77% in May from 8.91% in April, while the delinquency rate increased to 6.69% from 6.43%.